MMTC Ltd., New Delhi V. ACIT, New Delhi

ITA 1414/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86866 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 12-01-2015
• Assessment Year: 1995-1996
• Appeal Filed On: 21-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GUNJAN PRASHAD
• Assessee Lawyers: AJAY VOHRA SR ADV ROHIT JAIN
• Keywords: Depreciation; Competent authority; Scheme of amalgamation; Assessment record; Revised return; Unabsorbed depreciation
• Section: 244A; 80HHC; 147; 263; 144; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SHRI G.D. AGARWAL, VICE PRESIDENT AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO. 1414 /DEL/2011 ASSESSMENT YEAR : 1995 - 96 MMTC LTD., SCOPE COMPLEX, CORE - 1, LODHI ROAD, INSTITUTIONAL A REA, NEW DELHI. AAACM1433E VS. ACIT, CIRCLE 5(1), C.R. BLDG., NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. AJAY VOHRA, SR. ADV., ROHIT JAIN, ADV. & DEEPASHREE RAO, CA RESPONDENT BY : SH. GUNJAN PRASHAD, CIT - DR O R D E R PER C.M. GARG, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AG AINS T THE ORDER OF THE CIT(APPEALS) - VIII, NEW DELHI DATED 20.01.2011 IN APPEAL NO. 07/2009 - 10 FOR A.Y. 1995 - 96 . 2. GROUND NO. 1 & 9 OF THE ASSESSEE ARE OF GENERAL IN NATURE REMAINING GROUNDS OF TH E ASSESSEE READ AS UNDER: 2. THE AO HAS ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW ERRED IN REDUCING THE DEDUCTION U/S 80HHC OF THE ACT FROM RS. 30,32,43,522/ - ALREADY ALLOWED AS PER ORDER DATED 29.05.2000 PASSED U/S 154/250 OF THE ACT TO R S. 30,19,20,104/ - AS PER THE IMPUGNED ORDER WITHOUT ITA NO. 1414 /D/2011 2 ASSIGNING ANY REASONS AND ALSO WITHOUT PROVIDING ANY CALCULATION THEREOF, IN THE ABSENCE OF WHICH THE APPELLANT WILL NOT BE ABLE TO MAKE ANY SUBMISSIONS ON THE SAME. 3. THE AO HAS ON FACTS AND IN THE CIR CUMSTANCES OF THE CASE AND IN LAW ERRED IN NOT ALLOWING INTEREST U/S 244A OF THE ACT ON THE TAX REFUND OF RS. 663.12 LACS FROM 1/4/1995 (BEING THE DATE OF COMMENCEMENT OF THE ASSESSMENT YEAR) TILL 23/8/2007, (BEING THE DATE ON WHICH THE IMGPUNED ORDER IS S TATED TO HAVE BEEN RECEIVED BY THE CIT) A) PARTICULARLY WHEN THERE IS NO DELAY ATTRIBUTABLE TO THE APPELLANT. B) THE REFUND HAS ARISEN AS A RESULT OF THE ORDER OF ITAT GIVING EFFECT TO THE ORDER OF BIFR. C) STATING THAT THERE IS NO DELAY ON THE PART OF THE DEPARTME NT TILL 23/8/2007 (BEING THE DATE OF RECEIPT OF THE IMPUGNED ORDER BY THE CIT) WHICH IS NOT A LEGALLY TENABLE REASON TO DENY INTEREST U/S 244A(2) OF THE ACT. 4. THE AO HAS ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW ERRED WHILE CALCULATING IN TEREST U/S 244A AND; 4.1 DENYING INTEREST FOR THE MONTH OF MARCH 1998 ON THE PAYMENT OF RS. 7,75,50,260/ - MADE ON 25/03/1998 4.2 AND THEREAFTER ALLOWING INTEREST ON RS. 74,357,749, AFTER APPROPRIATING THE DIFFERENCE OF RS. 3192511 TOWARDS THE REFUND ATTR IBUTABLE TO BIFR REFUND; AND ALSO 4.3 NOT ALLOWING INTEREST FOR THE MONTHS OF NOVEMBER, 1998, AUGUST 1999, AND MARCH, 2006 (ON RS. 54,700,000) 5. THE AO HAS ERRED ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW WHILE CALCULATING INTEREST FOR THE PERIOD SEPTEMBER, 1999 TO MAY 2000 AT RS. NIL BY TAKING TO THE PRINCIPAL AMOUNT (ON WHICH INTEREST IS ADMISSIBLE) HAS BEEN WRONGLY TAKEN AS (MINUS) RS. 43,56,651/ - BEING THE DIFFERENCE BETWEEN TAX OF RS. 8,42,06,916 AND REFUND OF RS. 8,85,65,567/ - ITA NO. 1414 /D/2011 3 WHICH I NCLUDES INTEREST U/S 244A OF RS. 1,21,03,381/ - . INTEREST IS ADMISSIBLE ON RS. 77,44,730/ - (BEING THE DIFFERENCE BETWEEN RS. 84206916 AND RS. 7,64,62,186) 6. THE AO HAS ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW ERRED IN WITHDRAWING RS. 19,4 6,200/ - BEING THE INTEREST ALLOWED ON THE REFUND OF SELF ASSESSMENT TAX U/S 143(1) OF THE ACT AS PER ITNS 150 DT. 29.5.2000 FORMING PART OF ORDER U/S 250/143(1)(A), WHEREAS THE ITNS - 150 ACCOMPANYING THE IMPUGNED ORDER STARTS WITH POST SECTION 143(1) ORDERS ONLY, THEREBY REDUCING THE REFUND ADMISSIBLE TO THE APPELLANT. 7. THE AO HAS ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW ERRED IN NOT COMPLYING WITH THE MANDATORY PROVISIONS AS CONTAINED IN SEC. 245 BY NOT INTIMATING THE APPELLANT IN WRITING BEFORE SETTING OFF THE REFUND AGAINST THE AMOUNT PAYABLE UNDER FOR DIFFERENT YEARS, THE ADJUSTMENT IS THUS ILLEGAL AND DESERVES TO BE REVERSED. 8. THE AO HAS ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW ERRED IN NOT ISSUING THE BALANCE REFUND OF RS. 49,21,194/ - TO THE APPELLANT AS WORKED OUT IN THE ITNS - 150 ACCOMPANYING THE IMPUGNED ORDER. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THE APPEAL AND LEADING TO THE ISSUE S IN QUESTION ARE THAT A SCHEME OF AMALGAMATION BETWEEN THE ASSESSEE COMPANY AND MICA TRADING COMPANY LIMITED WAS APPROVED BY THE BOARD FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION (BIFR). THE SAID SCHEME WAS AFFECTED FROM 01/04/1994 I.E. BEGINNING OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. ACCORDING TO THE D ECLARATION U/S 72A OF THE I.T. ACT, 1961 (FOR SHORT THE ACT) PURSUANT TO WHICH IT WAS ORDERED THAT NOTWITHSTANDING ANYTHING CONTAINED IN ANY PROVISION OF THE ACT, THE ACCUMULATED LOSSES AND UNABSORBED DEPRECIATION ITA NO. 1414 /D/2011 4 OF AMALGAMATED COMPANY VIZ. MITCO SHALL BE DEEMED TO BE LOSS/DEPRECIATION OF THE ASSESSEE COMPANY FOR THE PREVIOUS YEAR IN WHICH THE AMALGAMATION WAS TO TAKE EFFECT. HOWEVER, IT WAS FURTHER PROVIDED IN THE DECLARATION/SCHEME OF AMALGAMATION AS APPROVED BY BIFR THAT THE TAX BENEFIT UNDER THE SCHEM E WILL BE RESTRICTED TO RS. 663.12 LACS ONLY. A PERUSAL OF THE ASSESSMENT RECORD REVEALS THAT THE BENEFIT OF SET OFF OF ACCUMULATED LOSSES AND UNABSORBED DEPRECIATION WAS INITIALLY CLAIMED BY THE ASSESSEE COMPANY IN A.Y. 1996 - 97 TO 1999 - 2000. THE AO ALLO WED BENEFIT OF SET OFF OF ACCUMULATED LOSSES PERTAINING TO MITCO WHICH WAS SUBSEQUENTLY WITHDRAWN BY THE DEPARTMENT IN TERMS OF ORDER U/S 154 OF THE ACT DATED 29/03/2004 THE RELIEF IN TERMS OF SCHEME OF MERGER WAS RESTRICTED TO THE EXTENT OF RS. 663.12 LAC S FOR THE YEAR UNDER CONSIDERATION IN THIS APPEAL. 4. BEING AGGRIEVED BY THE AFORESAID ACTION OF THE AO THE ASSESSEE COMPANY CARRIED THE MATTER BEFORE CIT(A) AND IN TERMS OF HIS ORDER DATED 22/07/2004 IT WAS DECIDED BY THE CIT(A) THAT THE BENEFIT OF RS. 66 3.12 LACS WAS IN TERMS OF TAX CREDIT AND NOT IN TERMS OF QUANTUM OF UNABSORBED LOSSES/DEPRECIATION OF MITCO AND, THEREFORE, THE AO WAS DIRECTED TO GRANT TAX BENEFIT TO THE ASSESSEE COMPANY FOR A.Y. 1995 - 96. SUBSEQUENTLY THE CIT(A) RECTIFY HIS OWN ORDER SO AS TO HOLD THAT THE TAX BENEFIT WAS TO BE GRANTED FOR A.Y. 1996 - 97 AND NOT FOR 1995 - 96 AS EARLIER HELD BY HIM. ITA NO. 1414 /D/2011 5 5. BEING AGGRIEVED BY THE AFORESAID RECTIFICATION MADE BY THE CIT(A) THE MATTER WAS BROUGHT BY THE ASSESSEE COMPANY BEFORE ITAT AND IN TERMS O F ORDER DATED 13/07/2007 IT WAS HELD BY THE ITAT THAT THE BENEFIT U/S 72A OF THE ACT WAS TO BE GRANTED IN THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE AMALGAMATION TAKES PLACE. ACCORDING TO ITAT ORDER (SUPRA), SINCE THE SCHEME OF AMALGAM ATION WAS TO TAKE EFFECT FROM 01/04/1994, THE BENEFIT OF TAX CREDIT WAS TO BE ALLOWED TO THE ASSESSEE COMPANY FOR THE A.Y. 1995 - 96 AND NOT FOR 1996 - 97 AS HELD BY THE CIT(A) IN TERMS OF HIS ORDER PASSED U/S 154 OF THE ACT DATED 22/07/2004. WHILE GIVING EFF ECT TO THE ORDER OF THE ITAT THE AO VIDE ORDER DATED 12/03/2009 U/S 254/143(3) OF THE ACT. THE CLAIM OF THE ASSESSEE COMPANY OF THE INTEREST U/S 244A OF THE ACT HAS BEEN DENIED. 6. THE EMPTY HANDED ASSESSEE FURTHER CARRIED OUT THE MATTER BEFORE CIT(A) AND ACTION OF THE AO WAS UPHELD BY DISMISSING THE GROUND OF APPEAL OF THE ASSESSEE COMPANY PERTAINING TO INTEREST U/S 244A OF THE ACT. NOW THE AGGRIEVED ASSESSEES BEFORE THIS TRIBUNAL WITH THE GROUNDS AS REPRODUCED HEREABOVE. 7. WE HAVE HEARD THE ARGUMENT OF BOTH THE SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD BEFORE US, INTER - ALIA, ORDER OF THE AO, ORDER OF THE FIRST APPELLATE AUTHORITY, PAPER BOOKS SUBMITTED BY THE ASSESSEE AND CASE WAS RELIED BY BOTH THE PARTIES. ITA NO. 1414 /D/2011 6 8. SINCE THE MAIN ISSUE IS REVOLVING AROUND THE PROVISION OF SECTION 244A OF THE ACT AND THE MAIN CONTENTION OF THE ASSESSEE IS THAT THE DELAY IN PROCEEDINGS IS NOT ATTRIBUTABLE TO THE ASSESSEE. THEREFORE, IT WAS CONTENDED BY THE LD. SR. COUNSEL FOR THE ASSESSEE THAT ASSE SSEE IS ENTITLED FOR INTEREST FOR THE PERIOD OF 01/04/1995 TO 23/08/2007. THE LD. SR. COUNSEL FURTHER SUBMITTED THAT THE CIT(A) UPHELD THE ACTION OF THE AO BY IGNORING CERTAIN FACTS THAT A NOTE WAS APPENDED WITH THE REVISED RETURN OF INCOME FIELD ON 31/03 /1997 ABOUT THE CONDITIONS TO BE FULFILLED AS PRESCRIBED U/S 72A OF THE ACT AND THE SUBMISSION OF THE ASSESSEE COMPANY VIDE LETTER DATED 06/10/2003 THEREON. THE LD. SR. COUNSEL FURTHER POINTED OUT THAT AS PER ORDER DATED 29/03/2004 PASSED BY THE AO U/S 15 4 OF THE ACT THE ASSESSEE COMPANY WAS ALLOWED RELIEF OUT OF INCOME U/S 72A OF THE ACT IN A.Y. 1995 - 96 TO THE EXTENT OF 663.12 LACS AND THE CIT(A) VIDE ORDER DATED 22/07/2004 FURTHER ALLOWED THE BENEFIT U/S 72A OF THE ACT OF EQUIVALENT INCOME SO AS TO ALLOW TAX CREDIT TO THE EXTENT OF SAME AMOUNT FOR ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. SR. COUNSEL VEHEMENTLY CONTENDED THAT THE CIT(A) WRONGLY REVERSE HIS OWN ORDER DATED 22/07/2004 DENYING RELIEF U/S 72A OF THE ACT AS THERE WAS NO DELAY ATTRIBUTABLE ON THE PART OF THE ASSESSEE COMPANY SO AS TO DENY INTEREST U/S 244A OF THE ACT. THE LD. SR. COUNSEL FURTHER POINTED OUT THAT THE REFUND HAS ARISEN CONSTANT EFFECT AS DIRECTED BY THE ITAT AND INTEREST U/S 244A OF THE ACT IS MANDATORILY ALLWOABLE BY THE PRO VISIONS OF THE ACT ON THE CONSEQUENTIAL ITA NO. 1414 /D/2011 7 REFUND. THE LD. SR. COUNSEL STRENUOUSLY CONTENDED THAT THE CIT(A) GROSSLY ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO IN LAW IN HOLDING THAT THE CLAIM OF THE ASSESSEE COMPANY IN REGARD TO THE INTEREST U/S 244A OF THE ACT IS NOT COVERED EITHER BY CLAUSE (A) OR (B) OF SUB - SECTION (1) OF SEC. 244A OF THE ACT. 9. THE LD. SR. COUNSEL FURTHER SUBMITTED THAT THE CIT(A) WRONGLY JUSTIFIED THE DENIAL OF ASSESSEE S CLAIM OF INTEREST U/S 244A OF THE ACT FOR THE YEAR UNDER CONSIDERATION ON THE BASIS OF NON CHARGING OF INTEREST U/S 220(2) OF THE ACT FOR A.Y. 1996 - 97 WHICH WAS EVEN OTHERWISE NOT LEVIABLE ACCORDING TO THE PROVISIONS OF LAW. THE LD. SR. COUNSEL FINALLY SUBMITTED THAT THE ASSESSEE COMPANY BE ALLOWED INTERE ST UPON INTEREST WRONGLY WITHHELD BY THE AO U/S 244A OF THE ACT ON REFUND OF RS. 662.12 LACS FOR THE PERIOD 01/04/1995 TO 23/08/2007 WHICH SHOULD HAVE BEEN ALLOWED ALONG WITH THE REFUND GRANTED PURSUANT TO THE ORDER OF THE AO DATED 12/02/2009 PASSED U/S 14 3(3) OF THE ACT. 10. REPLY TO THE ABOVE, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ACTION OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE COMPANY CANNOT TAKE DOUBLE BENEFIT AND THE DELAY WAS FULLY ATTRIBUTABLE TO THE ASSESSEE COMPANY AS PER SEQUENCE OF EVENTS NOTED BY THE AO AND THE CIT(A) IN THE IMPUGNED ORDER PARA 4.4 AT PAGE 3 TO 7 OF THE IMPUGNED ORDER. THE LD. DR FURTHER SUBMITTED THAT AS PER PROVISIONS OF SECTION 244A(2) OF THE ACT WHERE ANY QUESTION ARISES AS TO THE PERIOD TO B E ITA NO. 1414 /D/2011 8 EXCLUDED FOR THE CALCULATION OF INTEREST ON REFUND, IT SHALL BE DECIDED BY THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER AND WHOSE DECISION THEREON SHALL BE FINAL. 11. THE LD. DR FURTHER CONTENDED AND FAIRLY ACCEPTED THAT THE AO IN THIS CASE HAS NOT REFERRED THE MATTER EITHER TO THE CHIEF CIT OR CIT FOR THE DETERMINATION OF THE PERIOD FOR WHICH THE ASSESSEE WAS NOT ENTITLED TO THE INTEREST U/S 244A(1) OF THE ACT. LD. DR HAS PLACED HIS RELIANCE ON DECIS ION OF POWER FINANCE CORPORATION LTD. VS. ACIT, ITAT DELHI E BENCH (2009) 28 SOT 220 (DEL.). 12. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND VIGILANT PERUSAL OF THE RELEVANT MATERIAL ON THE RECORD, WE NOTE THAT IN THE PRES ENT CASE THE AO EXCLUDED THE PERIOD AT HIS OWN WHI LE PROCESSING THE CLAIM OF THE ASSESSEE FOR REFUND AND INTEREST THEREON PAYABLE U/S 244A(1) OF THE ACT. UNDER THE EXPRESS PROVISIONS OF SEC. 244A(2) OF THE ACT THE AO COULD NOT DO SO AS IT WAS OUTSIDE OF H IS JURISDICTION AND THE QUESTION OF EXCLUSION OF ANY PERIOD FOR THE PURPOSE OF GRANT OF INTEREST U/S 244A(1) OF THE ACT WAS NECESSARILY AND MANDATORILY TO BE DECIDED EITHER BY THE CHIEF COMMISSIONER OF INCOME TAX OR COMMISSIONER OF INCOME TAX. THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE AO DID NOT WORK IN ACCORDANCE WITH THE PROVISIONS OF LAW. FROM PERUSAL OF THE IMPUGNED ORDER OF THE CIT(A) WE ALSO NOTE THAT THE CIT(A) ALSO UPHELD THE ACTION OF THE AO IGNORING THE ITA NO. 1414 /D/2011 9 RELEVANT ST ATUTORY PROVISIONS OF THE ACT SPECIALLY PROVISION OF SEC. 244A(2) OF THE ACT. THUS, WE ARE INCLINED TO HOLD THAT NEITHER THE AO NOR THE CIT(A) WERE RIGHT IN ORDERING THE EXCLUSION OF ANY PERIOD FOR COMPUTATION OF INTEREST ON R EFUND U/S 244A(1) OF THE ACT A S IT WAS OUTSIDE THE AMBIT OF THEIR POWERS. 13. AT THIS STAGE IT WILL BE APPROPRIATE AND RELEVANT TO REPRODUCE PROVISIONS OF SECTION 244A OF THE ACT TO DECIDE THIS CONTROVERSY IN A JUDICIOUS MANNER, THUS, SAID PROVISION READS AS UNDER: 244A INTEREST ON REFUNDS : (1) WHERE REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE UNDER THIS ACT, HE SHALL, SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ENTITLED TO RECEIVE, IN ADDITION TO THE SAID AMOUNT, SIMPLE INTEREST THEREON CALCULATED IN THE FOLLOWING MANNER, N AMELY : (A) WHERE THE REFUND IS OUT OF ANY TAX PAID UNDER S. 115WJ OR COLLECTED AT SOURCE U/S 206C OR PAID BY WAY OF ADVANCE TAX OR TREATED AS PAID U/S 199, DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR, SUCH INTEREST SHALL BE CALCULATED AT THE RATE OF ONE - HALF PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE 1 ST APRIL OF THE ASSESSMENT YEAR TO THE DATE ON WHICH THE REFUND IS GRANTED: PROVIDED THAT NO INTEREST SHALL BE PAYABLE IF THE AMOUNT OF REFUND IS LESS TH AN TEN PER CENT OF THE TAX AS DETERMINED UNDER SUB - SECTION (1) OF S. 115WE OR SUB - S. (1) OF S. 143 OR ON REGULAR ASSESSMENT; (B) IN ANY OTHER CASE, SUCH INTEREST SHALL BE CALCULATED AT THE RATE OF ONE - HALF PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD OR PERIODS FROM THE DATE OR, AS THE CASE MAY BE, ITA NO. 1414 /D/2011 10 DATES OF PAYMENT OF THE TAX OR PENALTY TO THE DATE ON WHICH THE REFUND IS GRANTED. EXPLANATION : FOR THE PURPOSES OF THIS CLAUSE, DATE OF PAYMENT OF TAX OR PENALTY MEANS THE DATE ON AND FROM WHICH THE AMOUNT OF TAX OR PENALTY SPECIFIED IN THE NOTICE OF DEMAND ISSUED U/S 156 IS PAID IN EXCESS OF SUCH DEMAND. (2) IF THE PROCEEDINGS RESULTING IN THE REFUND ARE DELAYED FOR REASONS ATTRIBUTABLE TO THE ASSESSEE, WHETHER WHOLLY OR IN PART, THE PERIO D OF THE DELAY SO ATTRIBUTABLE TO HIM SHALL BE EXCLUDED FROM THE PERIOD FOR WHICH INTEREST IS PAYABLE , AND WHERE ANY QUESTION ARISES AS TO THE PERIOD TO BE EXCLUDED, IT SHALL BE DECIDED BY THE CHIEF CIT OR CIT WHOSE DECISION THEREON SHALL BE FINAL. (3) WH ERE, AS A RESULT OF AN ORDER UNDER SUB - S. (3) OF S. 115WE OR S. 115WF OR S. 115WG OR SUB - S. (3) OF S. 143 OR S. 144 OR S. 147 OR S. 154 OR S. 155 OR S. 250 OR S. 254 OR S. 260 OR S. 262 OR S. 263 OR S. 264 OR AN ORDER OF THE SETTLEMENT COMMISSION UNDER SUB - S. (4) OF S. 245D, THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB - S. (1) HAS BEEN INCREASED OR REDUCED, AS THE CASE MAY BE, THE INTEREST SHALL BE INCREASED OR REDUCED ACCORDINGLY, AND IN A CASE WHERE THE INTEREST IS REDUCED, THE AO SHALL SERVE ON THE ASSESSEE A NOTICE OF DEMAND IN THE PRESCRIBED FORM SPECIFYING THE AMOUNT OF THE EXCESS INTEREST PAID AND REQUIRING HIM TO PAY SUCH AMOUNT; AND SUCH NOTICE OF DEMAND SHALL BE DEEMED TO BE A NOTICE U/S 156 AND THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDING LY. (4) THE PROVISIONS OF THIS SECTION SHALL APPLY IN RESPECT OF ASSESSMENTS FOR THE ASSESSMENT YEAR COMMENCING ON THE 1 ST APRIL, 1989, AND SUBSEQUENT ASSESSMENT YEARS: ITA NO. 1414 /D/2011 11 PROVIDED THAT IN RESPECT OF ASSESSMENT OF FRINGE BENEFITS, THE PROVISIONS OF THIS SUB - SECTION SHALL HAVE EFFECT AS IF FOR THE FIGURES 1989 , THE FIGURES 2006 HAD BEEN SUBSTITUTED. 14. ON VIGILANT PERUSAL OF THE ORDER OF THE ITAT DELHI E BENCH IN THE CASE OF POWER FINANCE CORPORATION LIMITED VS. ACIT, WE NOTE THAT IN THE SIMILAR SET O FF FACTS AND CIRCUMSTANCES THE COORDINATE BENCH OF THIS TRIBUNAL DECIDED THE CONTROVERSY AS FOLLOWS: 11. SEC. 244A HAS BEEN INSERTED ON THE STATUTE BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1989 W.E.F. 1 ST APRIL, 1989 AND IT HAS BEEN INSERTED IN LIEU OF SS . 214, 243 AND 244. SUB - S. (1) OF S. 244A PROVIDES FOR GRANTING OF REFUND BY THE REVENUE TO THE ASSESSEE IN THE CASES WHERE PAYMENT OF ADVANCE TAX AND TDS EXCEEDS THE TAX LIABILITY. IN THE PRESENT CASE, THERE IS NO DISPUTE SO AS FOR THE ENTITLEMENT OF ASS ESSEE TO GET REFUND, BUT THE CONTROVERSY IS REGARDING THE PERIOD WHICH IS TO BE EXCLUDED AS PER PROVISIONS OF S. 244A (2). LOOKING TO THE LANGUAGE USED IN S. 244A , IT IS VERY CLEAR THAT THE AO, CONSIDERING THE FACTS BEFORE HIM, WILL HAVE TO DETERMINE WHETH ER THE ASSESSEE IS ENTITLED TO REFUND OR NOT AND IF HE IS ENTITLED TO REFUND THEN FOR WHAT PERIOD HE IS ENTITLED TO INTEREST AND FURTHER WHERE ANY QUESTION ARISES AS TO THE PERIOD TO BE EXCLUDED THE SAME SHALL BE DEC IDED EITHER BY CHIEF CIT OR CIT WHOSE DE CISION THEREON SHALL BE FINAL. HERE, IN THE PRESENT CASE, THE AO EXCLUDED THE PERIOD AT HIS OWN WHILE PROCESSING THE CLAIM OF THE ASSESSEE FOR REFUND. UNDER THE EXPRESS PROVISIONS OF S. 244A (2) THE AO COULD NOT DO SO AS IT WAS OUTSIDE OF HIS JURISDICTION AND THE QUESTION OF EXCLUSION OF ANY PERIOD FOR THE PURPOSE OF GRANT OF INTEREST U/S 244A (1) WAS NECESSARILY AND MANDATORILY TO BE DECIDED EITHER BY CHIEF CIT OR CIT. THUS, IN THE FACTS AND CIRCUMSTANCES OF ITA NO. 1414 /D/2011 12 THE CASE, THE AO DID NOT WORK IN ACCORDANCE WIT H THE PROVISIONS OF LAW WHICH IN ITSELF IS A MISTAKE APPARENT FROM RECORD. WHAT WAS REQUIRED TO BE DONE BY THE AO WAS TO REFER THE MATTER EITHER TO CHIEF CIT OR CIT FOR DETERMINATION OF PERIOD FOR WHICH THE ASSESSEE WAS NOT ENTITLED TO GRANT OF INTEREST U /S 244A(1). LD. CIT(A) IS ALSO WRONG IN HOLDING THAT THE AO WAS RIGHT IN EXCLUDING SUCH PERIOD. NO SUCH AUTHORITY IS VESTED IN AO TO EXCLUDE PERIOD AND IF ANY QUESTION HAS ARISEN FOR EXCLUSION OF ANY PERIOD, THE MANNER PROVIDED IN SUB - S. (2) HAS TO BE AD OPTED BY THE AO. THUS, NEITHER THE AO NOR THE CIT(A) WERE RIGHT IN ORDERING THE EXCLUSION OF ANY PERIOD AS THE EXCLUSION, IF ANY WAS OUTSIDE THEIR POWERS. TO THAT EXTENT THE ORDER OF THE AO AND CIT(A) SUFFERS FROM LEGAL INFIRMITY. KEEPING IN VIEW THE EN TIRETY OF FACTS AND THE RELEVANT PROVISIONS OF LAW, WE ARE OF THE OPINION THAT IT WOULD SERVE THE INTEREST OF JUSTICE IF THE MATTER IS RESTORED BACK TO THE FILE OF AO WITH A DIRECTION TO REFER THE ISSUE REGARDING EXCLUSION OF PERIOD AS PRESCRIBED IN SUB - S. (2) OF S. 244A EITHER TO CHIEF CIT OR CIT (AS THE CASE MAY BE) TO GET IT DETERMINED. WE FIND THAT SIMILAR ACTION OF THE TRIBUNAL WAS UPHELD BY HON BLE KERALA HIGH COURT IN THE CASE OF KERALA STATE CIVIL SUPPLIES CORPN. LTD. VS. JT. CIT (2006) 200 CTR (KE R) 653 : (2006) 282 ITR 647 (KER) WHEREIN IT WAS FOUND BY THE TRIBUNAL THAT THE AO WITHOUT REFERRING THE MATTER EITHER TO CHIEF CIT OR CIT HAD EXCLUDED THE PERIOD FOR GRANT OF INTEREST U/S 244A(1) AND IT WAS HELD THAT THE ORDER OF THE AO WAS TO BE SET ASID E TO ENABLE HIM TO PROCEED IN ACCORDANCE WITH THE PROVISIONS OF LAW AND THE AO WAS DIRECTED TO DEAL WITH THE MATTER AFRESH IN TERMS OF S. 244A(2). 15. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION TO HOLD THAT AS PER PROVISIONS OF SEC. 244A(2) OF THE ACT T HE ISSUE OF EXCLUSION OF ANY PERIOD FOR THE PURPOSE OF GRANT OF INTEREST U/S 244A(1) OF THE ACT WAS MANDATORILY TO ITA NO. 1414 /D/2011 13 BE DECIDED EITHER BY THE CHIEF COMMISSIONER OF INCOME TAX OR COMMISSIONER OF INCOME TAX AND THE AUTHORITIES BELOW DID NOT WORK IN ACCORDANCE WITH THE PROVISIONS OF LAW AND TO THAT EXTENT THE ORDER OF THE AO AND THE CIT(A) SUFFERS FROM LEGAL INFIRMITY. RESPECTFULLY FOLLOWING THE DECISION OF ITAT IN THE CASE OF POWER FINANCE CORPORATION LTD. VS. ACIT (SUPRA) AND KEEPING IN VIEW THE ENTIRETY OF F ACTS, CIRCUMSTANCES AND THE RELEVANT PROVISIONS OF THE LAW, WE ARE OF THE CONSIDERED OPINION THAT IT WOULD SERVE THE INTEREST OF JUSTICE IF THE MATTER IS RESTORED BACK TO THE FILE OF AO WITH A DIRECTION TO REFER THE ISSUE REGARDING EXCLUSION OF PERIOD AS P RESCRIBED IN SUB - SECTION (2) OF SEC. 244A OF THE ACT EITHER TO THE CHIEF COMMISSIONER OF INCOME TAX OR COMMISSIONER OF INCOME TAX, AS THE CASE MAY BE, TO GET IT DETERMINE. WE MAY ALSO POINT OUT THAT AS PER PROVISION OF SEC. 244A(2) OF THE ACT THE DECISION OF CHIEF COMMISSIONER OF INCOME TAX OR COMMISSIONER OF INCOME TAX SHALL BE FINAL ON THIS ISSUE AND, THEREFORE, REVENUE AUTHORITIES ARE DUTY BOUND TO REFER THE MATTER TO THE COMPETENT AUTHORITY FOR DETERMINATION OF THE ISSUE REGARDING EXCLUSION OF PERIOD A S PER PROVISIONS OF THE ACT. 16. IN VIEW OF THE ABOVE DISCUSSION AND RESPECTFULLY FOLLOWING THE DECISION OF POWER FINANCE CORPORATION LTD. V S. ACIT THE MATTER IS SET ASIDE AND RESTORED TO THE FILE OF AO TO DEAL WITH THE MATTER AFRESH IN TERMS OF SEC. 244A( 2) OF THE ACT. WE ORDER ACCORDINGLY. ITA NO. 1414 /D/2011 14 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AS INDICATED ABOVE. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 2 ND MARCH, 2015. SD/ - SD/ - ( G.D. AGARWAL ) VICE PRESIDENT ( C.M. GARG ) JUDICIAL MEMBER DATED: 02.03.2015 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR