The ACIT, Ahmedabad Circle-1, Ahmedabad V. Arvind Mills Ltd., Ahmedabad

ITA 1678/AHD/2005

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5899 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-06-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 24-06-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Rectification of order
• Section: 244A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI MUKUL SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 10/06/2010 DRAFTED ON: 1 0/06/2010 ITA NO.1678/AHD/2005 ASSESSMENT YEAR : 1995-96 THE ASST.CIT CIRCLE-1 AHMEDABAD VS. ARVIND MILLS LTD. NARODA ROAD AHMEDABAD 380 025 PAN/GIR NO. : AABCA 2398 D (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN, SR. D.R. RESPONDENT BY: SHRI VIJAY RANJAN O R D E R PER SHRI MUKUL SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL OF THE REVENUE ARISING FROM THE ORDER OF THE LEARNED CIT(APPEALS)-V, AHMEDABAD DATED 31/08/2005. THE ONLY SUBSTANTIVE GROUND OF THE REVENUE IS AS FOLLOWS:- THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING NOT TO WITHDRAW INTEREST U/S.244A OF RS.26,70,358/-. 2. PARTIES HEARD. CASE RECORD PERUSED. THE ISSUE IS COVERED BY AN EARLIER DECISION OF RESPECTED CO-ORDINATE BENCH B AHMEDABAD IN ASSESSEES OWN CASE, VIZ. THE ARVIND MILLS VS. ASST T.CIT (ITA NO.1590/AHD/2004 - A.Y. 1994-95) ORDER DATED 31/03/ 2009. RELEVANT FINDINGS AS PER PARAGRAPH NO.5 ARE REPRODUCED BELOW :- 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO GONE THROU GH THE CASE RECORDS, INCLUDING THE RECTIFICATION ORDER U/S.154 OF THE AC T, THE ORDER OF CIT(A) AS ITA NO.1678/AHD /2005 ASSTT.CIT VS. ARVIND MILLS LTD. ASST.YEAR - 1995-96 - 2 - WELL AS THE CHART FILED BY THE ASSESSEE CLAIMING TH E INTEREST ON REFUND U/S.244A OF THE ACT. NEITHER THE AO NOR THE CIT(A) HAS DISPUTED THE FACT OF ALLOWING OF INTEREST ON REFUND U/S.244A OF THE A CT, RATHER THEY HAVE ALLOWED ON THE ADJUSTED REFUNDS, ON ACCOUNT OF WHIC H, THIS REFUND HAS ARISEN. ONLY DISPUTE RAISED BY THE LOWER AUTHORITI ES IS, WHETHER, IN THE MONTH IN WHICH THE REFUND WAS ADJUSTED LIKE AS ON 3 1 ST MARCH, 1997, THE ASSESSEE IS ENTITLED FOR INTEREST ON THE REFUND FOR THE MONTH OF MARCH, 1997 OR NOT. FIRST OF ALL, WE HAVE GONE THROUGH THE RELEVANT SECTION, I.E., 244A OF THE ACT AND THE SAME IS REPRODUCED FOR THE SAKE OF CLARITY, AS UNDER:- INTEREST ON REFUNDS. 244A. (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, NAMELY:- (A) (B) (B) IN ANY OTHER CASE, SUCH INTEREST SHALL BE C ALCULATED AT THE RATE OF [ONE HALF PER CENT] FOR EVERY MONTH OR PART OF A MO NTH COMPRISED IN THE PERIOD OR PERIODS FROM THE DATE OR, AS THE CASE MAY BE, 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 MANS THE DATE ON AND FROM WHICH THE AMOUNT OF TAX OR PENALTY SPECIFIED IN THE NOTICE OF DEMAND ISSUED UNDER SECTION 156 IS PAID IN EXCESS OF SUCH DEMAND. NOW, WE WILL GO THROUGH THE RELEVANT RULE, I.E. RUL E 119A OF THE I.T. RULES, 1962, WHEREIN THE PROCEDURE IS PRESCRIBED TO BE FOLLOWED FOR CALCULATING THE INTEREST ON REFUND AS WELL AS ON DE MAND. THE RELEVANT PROCEDURE TO BE FOLLOWED IN CALCULATING INTEREST IS AS UNDER:- ACCORDING TO RULE 119A, NEWLY SUBSTITUTED WITH EFFE CT FROM 13-9-1989 BY THE INCOME-TAX (TENTH AMENDMENT) RULES, 1989, IN CALCULATING THE INTEREST PAYABLE BY THE ASSESSEE OR THE INTEREST PA YABLE BY THE CENTRAL GOVERNMENT TO THE ASSESSEE UNDER ANY PROVISION OF T HE INCOME-TAX ACT, 1961 IS AS UNDER:- (A) WHERE INTEREST IS TO BE CALCULATED ON ANNUAL BA SIS, THE PERIOD FOR WHICH SUCH INTEREST IS TO BE CALCULATED SHALL BE RO UNDED OFF TO A WHOLE MONTH OR MONTHS AND FOR THIS PURPOSE ANY FRAC TION OF A MONTH SHALL BE IGNORED; AND THE PERIOD SO ROUNDED O FF SHALL BE ITA NO.1678/AHD /2005 ASSTT.CIT VS. ARVIND MILLS LTD. ASST.YEAR - 1995-96 - 3 - DEEMED TO BE THE PERIOD IN RESPECT OF WHICH THE INT EREST IS TO BE CALCULATED; (B) WHERE THE INTEREST IS TO BE CALCULATED FOR EVER Y MONTH OR PART OF A MONTH COMPRISED IN A PERIOD, ANY FRACTION OF A MONT H SHALL BE DEEMED TO BE A FULL MONTH AND THE INTEREST SHALL BE SO CALCULATED; (C) THE AMOUNT OF TAX, PENALTY OR OTHER SUM IN RESP ECT OF WHICH SUCH INTEREST IS TO BE CALCULATED SHALL BE ROUNDED OFF T O THE NEAREST MULTIPLE OF ONE HUNDRED RUPEES AND FOR THIS PURPOSE ANY FRACTION OF ONE HUNDRED RUPEES SHALL BE IGNORED AND THE AMOUNT SO ROUNDED OFF SHALL BE DEEMED TO BE THE AMOUNT IN RESPECT OF WHICH THE INTEREST IS TO BE CALCULATED. THUS, IN TERMS OF SECTION 244A(1)(B) AND RULE 119A OF THE RULES, THE PERIOD FOR WHICH THE INTEREST ON REFUND IS CALCULAT ED IS THE PERIOD BETWEEN THE DATE OF PAYMENT OF SUCH TAX OR PENALTY UP TO THE DATE ON WHICH THE REFUND IS GRANTED. THE SECTION 244A(1), IN ITS CLAUSE (B), PROVIDES THAT WHERE REFUND IS OUT OF TAX OTHER THAN ADVANCE TAX OR TAX TREATED AS PAID UNDER SECTION 199 OR TAX COLLECTED AT SOURCE, THE INTEREST IS TO BE PAID AT THE RATES AS PRESCRIBED F ROM TIME TO TIME, FOR EVERY MONTH OR PAT OF A MONTH COMPRISED IN THE PERI OD STARTING FROM THE DATE OF PAYMENT OF SUCH TAX OR PENALTY UP TO TH E DATE ON WHICH THE REFUND IS GRANTED. IT IS ALSO CLARIFIED BY WAY OF A N EXPLANATION THAT 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 IS PAID IN EXCESS OF SUCH DEMAND. ACCORDING TO SEC. 244A, AS O PERATIVE FOR AND FROM ASSESSMENT YEAR 1989-90, THE RATE OF INTEREST TO BE GRANTED ON REFUNDS AS PER THE PROVISIONS OF THIS SECTION FOR E VERY MONTH OR PART OF MONTH COMPRISED IN THE PERIOD FOR WHICH INTEREST IS TO BE GRANTED. THE RULE 119A OF THE I.T. RULES, 1962 MAKES IT VERY CLE AR, PARTICULARLY CLAUSE (B) STATES THAT WHERE THE INTEREST IS TO BE CALCULATED FOR EVERY MONTH OR PART OF MONTH COMPRISED IN A PERIOD, ANY F RACTION OF A MONTH SHALL BE DEEMED TO BE A FULL MONTH AND THE INTEREST SHALL BE CALCULATED ACCORDINGLY. IN VIEW OF THE ABOVE PROVISIONS, WHIC H ARE VERY CLEAR, THE ASSESSEE IS ENTITLED FOR THE INTEREST ON REFUND, IN WHICH MONTH THE PAYMENT / ADJUSTMENT IS MADE. TAKING EXAMPLE FROM CHART OF THE ASSESSEE, IN ASSESSMENT YEAR 1993-94 A REFUND WAS A DJUSTED AS ON 31-03-1997, THE ASSESSING OFFICER SHOULD HAVE ALLOW ED INTEREST FOR THE MONTH OF MARCH, 1997 IN FULL IN VIEW OF THE RULE 11 9A OF THE I.T. RULES, 1962. ACCORDINGLY, THE ASSESSEE IS ENTITLED FOR IN TEREST ON REFUND FOR THE MONTH IN WHICH PAYMENT IS MADE. ACCORDINGLY, W E ALLOW THE CLAIM OF THE ASSESSEE AND THIS APPEAL OF THE ASSESSEE IS ALLOWED. 3. SINCE A VIEW HAS ALREADY BEEN TAKEN BY THE RESPE CTED CO-ORDINATE BENCH ' B ' AHMEDABAD ON IDENTICAL SET OF FACTS AND THE PARTIES ITA NO.1678/AHD /2005 ASSTT.CIT VS. ARVIND MILLS LTD. ASST.YEAR - 1995-96 - 4 - APPEARING BEFORE US HAVE SO PLEADED, THEREFORE, WE FIND NO REASON TO TAKE ANY OTHER VIEW BUT TO FOLLOW THE AFORE-CITED DECI SION. ACCORDINGLY ON THE SAME LINES, THE REVENUES GROUND IS HEREBY DISM ISSED. 4. IN THE RESULT, REVENUES APPEAL IS DISMIS SED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 18/ 06 /2010. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 18 / 06 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-V, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD