TOLANI EDUCATION FOUNDATION, MUMBAI V. ACIT CEN CIR 17 & 28, MUMBAI

ITA 1510/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8051 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 12-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: R VENKATRAMAN
• Section: 244A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM I .T.A. NO. 1510 /MUM/201 5 ( / ASSESSMENT YEAR : 2 0 0 4 - 05 ) TOLANI EDUCATION FOUNDAT ION, 10A, BAKHTAWAR, NARIMAN POINT, MUMBAIA - 400 021 VS. THE ACIT, CENTRAL CIRCLE 17 & 28, MUMBAI / APPELLANT .. / RESPONDENT ./ PAN : AAATT 0396G / ASSESSEE BY : SHRI R VENKATRAMAN /RE VENUE BY : SHRI V .JUSTIN / DATE OF HEARING : 11.12.2017 / DATE OF PRONOUNCEMENT : 11.12 . 2017 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE CHALLENGING THE O RDER DATED 12.01.2015 PASSED BY THE LD.CIT(A) - I, MUMBAI WHEREIN THE ASSESSEE HAS CHALLENGED EFFECTED DATE FROM WHICH THE INTEREST ON INCOME TAX REFUND UNDER SECTION 244A OF THE INCOME TAX ACT, 1961 READ WITH RULE 119A(B) OF THE INCOME TAX RULES, 1962 . 2 . THE ONLY ISSUE INVOLV ED IN THIS APPEAL IS NOT GRANTING THE INTEREST ON THE AMOUNT OF INCOME TAX REFUND ORDER ISSUED UP TO THE DATE OF ISSUE OF CHEQUE OF REFUND BY THE AO. ITA 1510 /MUM/201 5 2 3 . AT THE OUTSET, THE LD.AR BROUGHT TO OUR NOTICE THAT THE ISSUE INVOLVED IN THI S APPEAL IS IDENTICAL TO THE ONE RAISED IN ASSESSEES OWN CASE IN I.T.A. NOS.6508, 6509 & 6510/MUM/2013, (AY - 2002 - 03, 2003 - 04 & 2006 - 07) ORDER DATED 16.10.2015 WHICH HAS BEEN RESTORED TO THE FILE OF THE AO BY THE CO - ORDINATE BENCH OF THE TRIBUNAL T O CALCULATE THE INTEREST UP TO THE DATE ON WHICH THE REFUND VOUCHER WAS SIGNED BY THE AO. 4 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE IMPUGNED ORDERS AND THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE I N I.T.A. NOS.6508, 6509 & 6510/MUM/2013, (AY - 2002 - 03, 2003 - 04 & 2006 - 07 (SUPRA) . WE FIND THAT THE TRIBUNAL VIDE PARA 4 OF THE ABOVE MENTIONED ORDER HAS RESTORED BACK THE ISSUE TO THE FILE OF AO TO RE - CALCULATE THE REFUND AMOUNT BY ALLOWING INTEREST UP T O THE DATE OF ISSUE OF REFUND ORDER VIDE TRIBUNAL ORDER DATED 16.10.2015. FOR THE SAKE OF READY REFERENCE WE REPRODUCE THE OBSERVATIONS AND FINDINGS OF THE TRIBUNAL AS UNDER: 4. WE HAVE CAREFULLY GONE THROUGH THE FINDINGS OF THE LD. CIT(A) AND WE DO NOT A GREE WITH THE SAME. IT IS A SETTLED PROPOSITION OF LAW THAT INTEREST ON REFUND HAS TO BE GRANTED UPTO THE DATE OF ISSUE OF THE REFUND VOUCHER. THE TRIBUNAL MUMBAI BENCH HAD THE OCCASION TO CONSIDER A SIMILAR SITUATION IN THE CASE OF JAY BROS INVESTMENT AND TRADING CO. (P) LTD VS DCIT 74 TTJ 748 WHEREIN THE TRIBUNAL HAS HELD AS UNDER: WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. IN OUR VIEW, THE PLEA OF THE ASSESSEE DESERVES FAVOURABLE CONSIDERATION. IN SEVERAL CASES, WHERE A REFUND HAS TO BE GRANTED TO THE ASSESSEE, THE REVENUE OFFICIALS USED TO TAKE LONGER TIME IN CLEARING SUCH REFUNDS RESULTING IN CONSIDERABLE ITA 1510 /MUM/201 5 3 HARDSHIP TO THE ASSESSEE AND WITH A VIEW TO EXPEDITE GRANT OF REFUND, A UNIFORM PERIOD OF THREE MONTHS HAS BEEN SPEC IFIED IN SS. 243 AND 244 BY TAXATION LAWS (AMENDMENT) ACT, 1970. IF THERE IS DELAY BEYOND THE PERIOD OF THREE MONTHS, IT ACT PROVIDED FOR PAYMENT OF INTEREST TO THE ASSESSEE BY THE CENTRAL GOVERNMENT. WHILE IMPLEMENTING THE PROVISIONS OF S. 243 OF THE ACT, IT WAS AGAIN FOUND THAT THE AO GAVE A DIFFERENT INTERPRETATION OF THE SAID SECTION WHICH IS NOT INTENDED BY THE GOVERNMENT. WITH A VIEW TO CLARIFY THE ISSUE, THE CBDT ISSUED A CIRCULAR (EXTRACTED ABOVE). IT MAY ALSO BE NOTED THAT S. 243 IS OPERATIVE UPTO ASST. YR. 1988 - 89 ONLY WHEREAS S. 244A COMES INTO EFFECT FROM 1ST APRIL, 1989 IN LIEU OF SS. 214, 243 AND 244 AS CLARIFIED BY THE CBDT IN ITS CIRCULAR NO. 549 DT. 31ST OCT., 1989, [PUBLISHED AT (1990) 82 CTR (ST) 1]. THEREFORE, IT IS CLEAR THAT THE CIRCULA R ISSUED IN CONNECTION WITH S. 243 OF THE IT ACT EQUALLY APPLIES TO S. 244A. IT ALSO APPEALS TO LOGIC THAT INTEREST HAS TO BE PAID TILL THE DATE OF PREPARATION OF CHEQUE AS OTHERWISE THE PURPOSE OF GRANTING INTEREST WOULD BE DEFEATED BECAUSE IN THE GOVERNM ENT DEPARTMENTS THERE MAY BE LONG GAP BETWEEN THE FORMAL ORDER AND THE DATE OF PREPARATION OF CHEQUES. THE CBDT CATEGORICALLY STATED THAT INTEREST HAS TO BE GRANTED UPTO THE DATE OF REFUND VOUCHER. IN FACT, THE CHEQUE ISSUED BY THE GOVERNMENT IS KNOWN AS ' INCOME TAX REFUND ORDER'. THEREFORE, IT IS PROPER TO ASSUME THAT THE WORDS 'ON WHICH THE REFUND IS GRANTED' IN S. 244A MEAN THE DATE OF SIGNING THE INCOME - TAX REFUND ORDER I.E., THE REFUND VOUCHER. WE, THEREFORE, DIRECT THE AO TO CALCULATE INTEREST PAYABLE TO THE ASSESSEE FROM FIRST DAY OF APRIL OF THE ASSESSMENT YEAR TO THE DATE ON WHICH THE REFUND VOUCHER IS SIGNED. CONSIDERING THE CIRCUMSTANCES OF THE CASE, WE ARE ALSO OF THE VIEW THAT IT IS A FIT CASE FOR AWARDING COSTS TO THE ASSESSEE UNDER S. 255(2B) OF THE ACT. IN OUR VIEW, AWARDING COST OF RS. 3,000 WOULD MEET THE ENDS OF JUSTICE AND WE HEREBY DIRECT THE RESPONDENT TO DEPOSIT THE COST WITH THE DY. REGISTRAR, TRIBUNAL (MUMBAI ZONE) WITHIN ONE MONTH FROM THE DATE OF RECEIPT OF THE ORDER AND THE REGISTR Y IS FURTHER DIRECTED TO COLLECT THE COST AND PAY THE SAME TO THE ASSESSEE UPON PRESENTING AN APPLICATION TO THAT EFFECT. RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO - ORDINATE BENCH, WE DIRECT THE AO TO CALCULATE INTEREST AS PER THE PROVISIONS OF THE LA W UPTO THE DATE ON WHICH THE REFUND VOUCHER IS SIGNED. ITA 1510 /MUM/201 5 4 WE , THEREFORE , IN ORDER TO MAINTAIN THE CONSISTENCY WITH THE COORDINATE BENCH DECISION IN ASSESSEES OWN CASE REST ORE THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTION TO RE - CALCULATE THE INTER EST U/S 244A UPTO THE DATE OF REFUND ORDER. 5 . IN THE RESULT, APPEAL FILED BY T HE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. O RDER WAS PRONOUNCED IN THE OPEN COURT ON 11TH DEC, 2017 . S D SD ( MAHAVIR SINGH ) ( RAJESH KUMAR ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 11. 12 .2017 SRL,SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, T RUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI