DCIT, CHENNAI V. M/s. Wheels India Ltd., CHENNAI

ITA 2235/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8029 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 26-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 244A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NOS.2235, 2236 & 2237/MDS/2016 * +* / ASSESSMENT YEARS : 2006-07, 2007-08 & 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAX PAYER UNIT 1, CHENNAI - 600 034. V. M/S WHEELS INDIA LIMITED, NO.21, PATTULOS ROAD, CHENNAI - 600 002. PAN : AAACW 0315 K (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SH. SHIVA SRINIVAS, JCIT /0-. 1 2 / RESPONDENT BY : SH. R. VIJAYARAGHAVAN, ADVOCAT E ' 1 3& / DATE OF HEARING : 25.10.2016 45+ 1 3& / DATE OF PRONOUNCEMENT : 25.11.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THESE APPEALS OF THE REVENUE ARE DIRECTED AG AINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS) -17, CHENNAI, DATED 30.03.2016 FOR THE AS SESSMENT YEARS 2006-07, 2007-08 AND 2009-10. 2 I.T.A. NOS.2235 TO 2237/MDS/16 2. THERE WAS A DELAY OF 2 DAYS IN FILING THESE APPE ALS BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR COND ONATION OF DELAY. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE AND THE LD. COUNSEL FOR THE ASSESSEE. WE FIND THAT THE RE WAS SUFFICIENT CAUSE FOR NOT FILING THESE APPEALS BEFORE THE STIPU LATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEA LS. 3. SHRI SHIVA SRINIVAS, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE CIT(APPEALS) HAS DIRECTED THE AS SESSING OFFICER TO GRANT INTEREST ON INTEREST FOR THE DELAY IN REFU ND OF THE TAX PAID BY THE ASSESSEE. REFERRING TO THE JUDGMENT OF APEX CO URT IN CIT V. GUJARAT FLUORO CHEMICALS (2013) 358 ITR 291, THE LD . D.R. SUBMITTED THAT THE APEX COURT FOUND THAT INTEREST O N INTEREST CANNOT BE ALLOWED. THE LD. D.R. FURTHER SUBMITTED THAT TH E EARLIER JUDGMENT OF APEX COURT IN SANDVIK ASIA LTD. V. CIT AND OTHER S (2006) 280 ITR 643 WAS REVERSED BY THE APEX COURT IN GUJARAT F LUORO CHEMICALS (SUPRA). THEREFORE, LEVY OF INTEREST ON THE INTEREST FOR DELAYED REFUND OF TAX PAID IS NOT JUSTIFIED. 4. ON THE CONTRARY, SH. R. VIJAYARAGHAVAN, THE LD.C OUNSEL FOR THE ASSESSEE, SUBMITTED THAT IT IS NOT A PAYMENT OF INTEREST ON INTEREST. ACCORDING TO THE LD. COUNSEL, IT IS AN A DJUSTMENT OF REFUND 3 I.T.A. NOS.2235 TO 2237/MDS/16 MADE BY THE ASSESSING OFFICER TOWARDS INTEREST, INI TIALLY. REFERRING TO THE ORDER PASSED BY THE ASSESSING OFFICER FOR TH E ASSESSMENT YEAR 2009-10 DATED 21.04.2014, THE LD.COUNSEL SUBMI TTED THAT INTEREST UNDER SECTION 244A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR THE PERIOD FROM APRIL, 2009 TO MARCH , 2011 WAS ` 31,55,243/-. THIS COMPUTATION OF INTEREST IS NOT I N DISPUTE. THE TAX REFUNDABLE IS ADMITTEDLY ` 2,62,93,692/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER REFUNDED A SUM OF ` 73,89,520/- ON 29.03.2011 INSTEAD OF TOTAL REFUNDABLE AMOUNT OF ` 2,94,48,035/-. OUT OF REFUND OF ` 73,89,520/-, THE INTEREST PAYABLE BY THE DEPARTMENT TO THE EXTENT OF ` 31,55,243/- HAS TO BE FIRST ADJUSTED. THE BALANCE AMOUNT HAS TO BE ADJUSTED TOWARDS THE R EFUND OF EXCESS TAX PAID BY THE ASSESSEE. SINCE THERE WAS F URTHER DELAY IN REFUND OF AMOUNT, THE ASSESSING OFFICER HAS TO PAY INTEREST ON THE REFUND OF EXCESS TAX WHICH WAS DELAYED FURTHER. TH EREFORE, ACCORDING TO THE LD. COUNSEL, IT IS NOT A CASE OF P AYMENT OF INTEREST ON INTEREST. IT IS A CASE OF ADJUSTMENT OF AMOUNT REPAID TOWARDS THE INTEREST PAYABLE BY THE REVENUE. THEREFORE, ACCORD ING TO THE LD. COUNSEL, THE DEPARTMENT IS NOT CORRECT IN CLAIMING THAT THE CIT(APPEALS) HAS DIRECTED THE DEPARTMENT TO PAY INT EREST ON INTEREST. 4 I.T.A. NOS.2235 TO 2237/MDS/16 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE ORDER OF THE CIT(APPEALS), IT IS OBVIOUS THAT THE CIT(APP EALS) DIRECTED THE ASSESSING OFFICER TO PAY INTEREST ON THE TOTAL AMOU NT PAYABLE BY THE DEPARTMENT INCLUDING THE INTEREST. THEREFORE, PART LY THE DIRECTION OF THE CIT(APPEALS) IS COVERING THE INTEREST ON THE IN TEREST. MOREOVER, THE APEX COURT IN GUJAT FLUORO CHEMICALS (SUPRA) EXAMINED THIS ISSUE ELABORATELY AND HELD THAT THE D EPARTMENT IS NOT LIABLE TO PAY INTEREST ON INTEREST AND IT WAS FURTH ER POINTED OUT THAT THE JUDGMENT OF APEX COURT IN SANDVIK ASIA LTD. (SU PRA) IS NOT A GOOD LAW. 6. NOW THE LD.COUNSEL FOR THE ASSESSEE CLAIMS BEFOR E THIS TRIBUNAL THAT INTEREST ON INTEREST IS NOT PAYABLE B UT THE REFUND ACTUALLY GIVEN BY THE DEPARTMENT HAS TO BE ADJUSTED TOWARDS THE PAYMENT OF INTEREST INITIALLY. THIS CLAIM OF THE A SSESSEE IS CORRECT. WHEREVER THERE WAS REFUND OR REPAYMENT OF MONEY, TH E AMOUNT HAS TO BE FIRST ADJUSTED TOWARDS PAYMENT OF INTEREST. IN THE CASE BEFORE US, THE ASSESSING OFFICER QUANTIFIED THE AMOUNT REF UNDABLE WHICH WAS CONSIDERED TO BE PAID BY THE ASSESSEE EXCESSIVE LY AND ALSO COMPUTED INTEREST THEREON. EVEN AFTER COMPUTATION OF THE EXCESS 5 I.T.A. NOS.2235 TO 2237/MDS/16 TAX PAID BY THE ASSESSEE AND PAYMENT OF INTEREST TH EREON, THE ASSESSING OFFICER HAS REPAID ONLY A PART OF THE AMO UNT. THEREFORE, THE ASSESSEE NOW CLAIMS THAT THE PART OF THE AMOUNT REPAID BY THE ASSESSING OFFICER HAS TO BE FIRST ADJUSTED TOWARDS INTEREST. WE FIND MERIT IN THE CLAIM OF THE ASSESSEE. WHEN THE ASSES SING OFFICER REPAID PART OF THE AMOUNT TO BE REFUNDED TO THE ASS ESSEE, FIRST IT HAS TO BE ADJUSTED TOWARDS THE INTEREST AND IF ANYTHING REMAINS, IT HAS TO BE ADJUSTED TOWARDS REFUND OF EXCESS TAX PAID BY TH E ASSESSEE. THEREFORE, THE EXCESS TAX REMAINS TO BE REFUNDED BY THE DEPARTMENT IS AGAIN SUBJECT TO PAYMENT OF INTEREST UNDER SECTION 244A OF THE ACT. IT IS NOT KNOWN WHY THE DEPARTMEN T HAS NOT REFUNDED THE ENTIRE AMOUNT AFTER QUANTIFICATION OF THE EXCESS TAX REFUNDABLE BY THE DEPARTMENT TOGETHER WITH INTEREST THEREON. WHATEVER THE CASE MAY BE, AFTER THE ADJUSTMENT OF I NTEREST FROM THE REFUND MADE BY THE DEPARTMENT, IF EXCESS TAX REMAIN S TO BE REFUNDED, THE DEPARTMENT HAS TO PAY INTEREST UNDER SECTION 244A OF THE ACT. HOWEVER, THE MATTER NEEDS TO BE RE-EXAMIN ED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL ADJ UST THE AMOUNT REFUNDED TOWARDS THE INTEREST FIRST AND ANYTHING RE MAINS FURTHER, IT 6 I.T.A. NOS.2235 TO 2237/MDS/16 HAS TO BE ADJUSTED TOWARDS REFUND OF EXCESS TAX. T HEREAFTER, THE DEPARTMENT IS LIABLE TO PAY INTEREST ON THE TAX REF UNDABLE TILL THE ACTUAL REPAYMENT WAS MADE BY THE DEPARTMENT. 7. WITH THE ABOVE OBSERVATION, ALL THE APPEALS OF T HE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 25 TH NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 25 TH NOVEMBER, 2016. KRI. 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-17, CHENNAI-34 4. ' :3 /CIT, LTU, CHENNAI 5. 8; /3 /DR 6. * < /GF.