DCIT CEN CIR 1(2), MUMBAI V. CIPLA LTD, MUMBAI

ITA 3090/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8161 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2017
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 16-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 22-05-2015
• Court: TRIBUNAL
• Department Lawyers: PURUSHOTTAM KUMARDR
• Assessee Lawyers: V MOHAN
• Section: 143(3); 244A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO.3090/MUM/2015 ASSESSMENT YEAR: 2010-11 DCIT, CENTRAL CIRCLE-1(2), ROOM NO.906, PRATISHTHA BHAVAN, 10 TH FLOOR, OLD C.G.O. BUILDING ANNEXE, MUMBAI-400020 / VS. M/S . CIPLA LTD. 289, BELLASIS ROAD, MUMBAI CENTRAL, MUMBAI-400008 ( ' / REVENUE) ( #$ % /ASSESSEE) P.A. NO. AAACC1450B #$ % / ASSESSEE BY SHRI V. MOHAN ' / REVENUE BY SHRI PURUSHOTTAM KUMAR-DR * '+ , % - / DATE OF HEARING : 16/03/2017 , % - / DATE OF ORDER: 29/03/2017 CIPLA LTD. ITA NO.3090/MUM/2015 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 09/03/2015 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, DIRECTING THE ASSESSING OFFICER TO GRANT INTEREST U /S 244A OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) ON E XCESS PAYMENT OF SELF ASSESSMENT TAX WITHOUT APPRECIATING THAT THE TAX PAID ON SELF ASSESSMENT WOULD NOT FALL U/S 244A(1)(B) OF THE ACT AS HELD IN CIT VS ENGINEERS I NDIA LTD. 55 TAXMAN.COM 1 (DEL.). 2. DURING HEARING, THE LD. DR, PURUSHOTTAM KUMAR, ADVANCED ARGUMENTS, WHICH ARE IDENTICAL TO THE GROU ND RAISED. THE LD. DR HAS ALSO FILED WRITTEN SUBMISSIO NS, WHICH ARE KEPT ON RECORD. IN THE WRITTEN SUBMISSIONS, THE LD. DR HAS ALSO RELIED UPON THE AFORESAID DECISION OF ENGI NEERS INDIA LTD. (SUPRA). ON THE OTHER HAND, THE LD. COUN SEL FOR THE ASSESSEE, SHRI V. MOHAN , RELIED UPON THE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF TH E STOCK HOLDING CORPORATION OF INDIA LTD. VS CIT (WRIT PETI TION NO.823 OF 2000) ORDER DATED 17/11/2014 AND CIT VS I NDIAN OIL CORPORATION LIMITED (INCOME TAX APPEAL NO.801 O F 2012). 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RE LEVANT CIPLA LTD. ITA NO.3090/MUM/2015 3 PORTION FROM THE ORDER DATED 17/11/2014 IN THE CASE OF THE STOCK HOLDING CORPORATION OF INDIA LTD. FROM HON'BL E JURISDICTIONAL HIGH COURT FOR READY REFERENCE AND A NALYSIS:- THE CHALLENGE IN THIS PETITION IS TO THE ORDER DATED 28 SEPTEMBER 1999 PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 264 OF THE INCOME TAX A CT, 1961 ('THE ACT'). THE IMPUGNED ORDER HOLDS THAT NO INTEREST IS PAYABLE UNDER SECTION 244A(1) (B) OF THE ACT ON THE REFUND OF EXCESS AMOUNT PAID AS TAX ON SELF ASSESSMENT UND ER SECTION 140A OF THE ACT. 2. THE ASSESSMENT YEAR INVOLVED IN ASSESSMENT YEAR 199 4- 95. 3. BRIEFLY, THE FACTS LEADING TO THIS PETITION, ARE AS UNDER (A) ON 23 NOVEMBER 1994, THE PETITIONER FILED ITS R ETURN OF INCOME FOR ASSESSMENT YEAR 1994-95 DECLARING A TOTA L INCOME OF RS.13.12 CRORES. THE TAX PAYABLE ON THE D ECLARED INCOME WAS RS.6.79 CRORES. THE PETITIONER PAID THE TAX BY WAY OF ADVANCE TAX AND CREDIT FOR TAX DEDUCTED AT SOURC E. HOWEVER AS THERE WAS STILL A SHORTAGE OF TAX PAYABLE, THE PETI TIONER PAID RS.2.60 CRORES ON 31 AUGUST 1994 AS AND BY WAY OF TAX ON SELF ASSESSMENT. THE CHALLAN EVIDENCING THE PAYMENT OF T HE TAX ON SELF ASSESSMENT WAS ANNEXED ALONG WITH THE RETURN O F INCOME. (B) ON 31 DECEMBER 1996 THE ASSESSING OFFICER COMPLETED THE ASSESSMENT FOR ASSESSMENT YEAR 1994-95 UNDER SE CTION 143(3) OF THE ACT. THE ABOVE ORDER DATED 31 DECEMBE R 1996 DETEIMINED THE PETITIONER'S INCOME AT RS.15.27 CRORES. CONSEQUENT TO THE ABOVE, A NOTICE OF DEMAND UNDER S ECTION 156 OF THE ACT WAS ISSUED TO THE PETITIONER RAISING A D EMAND OF RS.1.76 CRORES. IT APPEARS THAT THE DEMAND OF RS.1. 76 CRORES WAS SET OFF AGAINST THE REFUND DUE TO THE PE TITIONER FOR ASSESSMENT YEAR 1995-96. (C) BEING AGGRIEVED, THE PETITIONER CARRIED THE MATTER IN APPEAL TO COMMISSIONER OF INCOME-TAX (APPEALS) (CIT )(A). ON 11 SEPTEMBER 1997, THE CIT(A) SUBSTANTIALLY ALLOWED TH E PETITIONER'S APPEAL. CIPLA LTD. ITA NO.3090/MUM/2015 4 (D) CONSEQUENT TO THE ABOVE, BY AN ORDER DATED 20 O CTOBER 1998, THE ASSESSING OFFICER GAVE EFFECT TO THE ORDE R DATED 11 SEPTEMBER 1997 OF THE CIT(A). AS A RESULT OF GIVING EFFECT TO THE ORDER OF THE CIT(A), THE PETITIONER WAS GRANTED A REFUND OF RS 2 CRORES (TAX OF RS.1.71 CRORES AND INTEREST OF RS.29 LACS). HOWEVER, NO INTEREST INTER ALIA WAS GRANTED ON RS.18.24 LACS FROM THE DATE OF PAYMENT OF TAX ON SELF ASSESS MENT, I.E. 31 AUGUST 1994 TILL THE DATE OF REFUND I.E. 24 OCTOBER 1998. (E) THUS THE PETITIONER PREFERRED A REVISION APPLICATION TO THE COMMISSIONER OF INCOME TAX UNDER SECTION 264 OF THE ACT. IN ITS REVISION APPLICATION THE PETITIONER SOUGHT TOTAL INTEREST OF RS.42.87 LACS. THIS COMPRISED OF INTEREST OF RS.33.75 LACS PAYABLE ON R EFUND OF RS.1.53 CRORES (ADJUSTMENT OF REFUND FOR A.Y. 1995- 96 TO MEET DEMAND FOR A.Y. 1994-95) AND INTEREST OF RS.9. 12 LACS PAYABLE ON REFUND ON TAX OF RS.18.24 LACS (BEI NG THE TAX PAID ON SELF ASSESSMENT FOR A.Y. 1994-95). (F) ON 28 SEPTEMBER 1999, THE COMMISSIONER OF INCOME TAX PARTLY ALLOWED THE PETITIONER'S REVISION APPLICATION TO THE EXTENT IT DIRECTED PAYMENT OF IN TEREST ON RS.1.53 CRORES ADJUSTED OUT OF REFUND FOR A.Y. 1995 -96 TO MEET THE TAX DEMAND FOR A.Y. 1994-95. HOWEVER IT REJECTED THE PETITIONER'S CLAIM FOR INTEREST OF RS. 9.12 LACS BEING THE INTEREST ON REFUND OF TAX PAID ON SELF-AS SESSMENT OF RS.18.24 LACS. 4. FOR BETTER APPRECIATION OF THE RIVAL CONTENTIONS, IT IS NECESSARY TO REPRODUCE SECTION 2 44A OF THE ACT, WHICH READS AS UNDER:- 'INTEREST ON REFUNDS 244A(1) WHERE REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE UNDER THIS ACT, HE SHALL, SUBJECT T O THE PROVISIONS OF THIS SECTION, BE ENTITLED TO RECEIVE, IN ADDITION TO THE SAID AMOUNT, SIMPLE INTEREST THEREO N CALCULATED IN THE FOLLOWING MANNER, NAMELY : (A) WHERE THE REFUND IS OUT OF ANY TAX [COLLECTED A T SOURCE UNDER SECTION 206C OR] PAID BY WAY OF ADVANCE TAX O R TREATEDAS PAID UNDER SECTION 199, DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR, SUCH INTEREST SHALL BE CALCULATED AT THE RATE OF ONE PERCENT FOR EVERY MONTH OR PART OF A MONTH COMPRISE D IN CIPLA LTD. ITA NO.3090/MUM/2015 5 THE PERIOD FROM THE 1' DAY OF APRIL OF THE ASSESSME NT YEAR TO THE DATE ON WHICH THE REFUND IS GRANTED: PROVIDED THAT NO INTEREST SHALL BE PAYABLE IF THE AMOUNT OF REFUND IS LESS THAN TEN PER CENT OF THE T AX AS DETERMINED [UNDER SUB-SECTION (1) OF SECTION 143 OR ] ON REGULAR ASSESSMENT; (B) IN ANY OTHER CASE, SUCH INTEREST SHALL BE CALCULATED AT THE RATE OF ONE PERCENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD OR PERIODS FROM THE DATE OR, AS THE CASE MAY BE, DATES OF PAYMENT OF TH E 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 SPECIFI ED IN THE NOTICE OF DEMAND ISSUED UNDER SECTION 156 IS PA ID IN EXCESS OF SUCH DEMAND. (2) . (3) .. (4) ...... 5. MR. JITENDRA JAIN, LEARNED COUNSEL APPEARING FOR THE PETITIONER IN SUPPORT SUBMITS AS UNDER :- (A) THE ISSUE OF GRANT OF INTEREST IS NO LONGER RES-INT EGRA IN VIEW OF THE DECISION OF THE SUPREME COURT IN UNION OF INDIA V/S TATA CHEMICALS [2014] 363 ITR PAGE 658. THUS, THE REVENUE SHOULD BE DIRECTED TO GRANT INTER EST ON THE EXCESS AMOUNT PAID AS TAX ON SELF ASSESSMENT UN DER SECTION 140A OF THE ACT; (B) SECTION 244A (1) OF THE ACT PROVIDES THAT REFUND OF AN AMOUNT DUE UNDER THE ACT TO THE ASSESSEE WOULD ENTI TLE THE ASSESSEE TO RECEIVE THE SAME ALONG WITH INTERES T. THIS WOULD GOVERN REFUND GRANTED BOTH UNDER CLAUSES (A) & (B) OF SUB-SECTION (1) OF SECTION 244A OF THE ACT. SECT ION 244A(1) (A) WOULD GOVERN REFUNDS OUT OF ADVANCE TAX AND TAX DEDUCTED AT SOURCE WHILE SECTION 244A(1)(B) OF THE ACT WOULD GOVERN ALL OTHER REFUNDS INCLUDING TAX PA ID ON SELF ASSESSMENT. THIS VIEW IS ALSO SUPPORTED BY CBD T CIRCULAR NO.549 DATED 30 OCTOBER 1989; CIPLA LTD. ITA NO.3090/MUM/2015 6 AND (C) THE EXPLANATION TO SECTION 244A(1)(B) WOULD HAVE NO APPLICATION TO THE PRESENT FACTS. THIS IS PARTIC ULARLY SO AS NO AMOUNT HAS BEEN PAID IN EXCESS OF THE DEMAND SPECIF IED UNDER SECTION 156 OF THE ACT. FOR ALL THE ABOVE REASONS, IT IS SUBMITTED THAT THE PETITION BE ALLOWED. 6. AS AGAINST THE ABOVE, MR. ARVIND PINTO, APPEARIN G FOR THE REVENUE IN SUPPORT OF THE IMPUGNED ORDER, SUBMITS A S TINDER :- (A) THE AMOUNT PAID BY THE PETITIONER ON SELF ASSESSMENT WAS EVEN ACCORDING TO THE PETITIONER NOT TAX PAYABLE. THIS, HE SUBMITS, IS EVIDENT FROM THE COMPUTATION OF INCOME FILED BY THE PETITIONER WHERE THEY CLAIM A REFUND OF RS.47,15 LACS. CONSEQUENTLY, THE AMOUNT PAID IN EXCESS, NOT BEING TAX, WOULD ENTITLE THE PETITIONER ONLY TO THE REFUND OF THE PRINCIPAL AMOUNT PAID AND NOT ANY INTEREST THEREON; (B) THE APEX COURT DECISION IN TATA CHEMICALS (SUPRA), WOULD HAVE NO APPLICATION TO THE PRESENT FACTS AS T HE PETITIONERS THEREIN HAD DEDUCTED A LARGER QUANTUM OF TAX THEN L IABLE TO BE DEDUCTED IN VIEW OF AN ORDER PASSED BY THE AUTHORIT IES UNDER THE ACT. IN THIS CASE, THE PETITIONER HAS MAD E THE PAYMENT VOLUNTARILY AND NOT CONSEQUENT TO ANY ORDER PASSED UNDER THE ACT; AND (C) IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE AFORESAID, IT IS SUBMITTED THAT, IF ANY INTEREST IS AT ALL TO BE ALLOWED TO THE PETITIONER, THE SAME CAN ONLY BE FRO M THE DATE ON WHICH THE NOTICE UNDER SECTION 156 OF THE ACT IS ISSUED TO THE PETITIONER. IN THIS CASE, ACCORDING TO HIM, IT WAS ISSUED ON THE DATE OF THE ASSESSMENT ORDER. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ON A BARE ANALYSIS OF SECTION 244A(1) OF THE ACT IT IS CLEAR THAT AMOUNT PAID BY THE PETITIONER AS TAX ON SELF ASSESS MENT WOULD NOT STAND COVERED BY SECTION 244A(1) (A) OF THE ACT . THIS IS SO AS IT IS NEITHER THE PAYMENT OF TAX BY WAY OF ADVAN CE TAX OR BY WAY OF TAX DEDUCTED AT SOURCE. THUS TAX PAID ON SEL F ASSESSMENT WOULD FALL UNDER SECTION 244A(1) (B) OF THE ACT, I. E. A RESIDUARY CIPLA LTD. ITA NO.3090/MUM/2015 7 CLAUSE COVERING REFUNDS OF AMOUNT NOT FALLING UNDER SECTION 244A(1) OF THE ACT. THE REVENUE CONTENDS THAT IN TH E ABSENCE OF TAX ON SELF ASSESSMENT FINDING MENTION IN SECTIO N 244A(1) (A) OF THE ACT, NO INTEREST IS PAYABLE UNDER SECTION 24 4A(1) OF THE ACT AND SECTION 244A(1) (B) OF THE ACT WOULD HA VE NO APPLICATION. THIS CONTENTION IS OPPOSED TO THE MEAN ING OF THE PROVISION DISCLOSED EVEN ON A BARE READING. IF THE TAX PAID IS NOT COVERED BY CLAUSE (A) OF SECTION 244A(1), IT FA LLS WITHIN CLAUSE (B), WHICH IS A RESIDUARY CLAUSE. BESIDES, T HIS CONTENTION STANDS NEGATIVED BY THE CBDT CIRCULAR BE ARING NO.549 DATED 31 OCTOBER 1989 WHEREIN REFERENCE IS M ADE TO SECTION 244A AND PARA 11.4 THEREOF READS AS UNDER 11.4 THE PROVISIONS OF THE NEW SECTION 244A ARE AS UNDER:- (I) SUB-SECTION (1) PROVIDES THAT WHERE IN PURSUANC E OF ANY ORDER PASSED UNDER THIS ACT, REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE THEN- (A) IF THE REFUND IS OUT OF ANY ADVANCE TAX PAID OR TAX DEDUCTED AT SOURCE DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR, INTEREST SHALL BE PAYABLE FOR THE PERIOD STARTING FROM THE 1ST APRIL OF THE ASSESSMENT YEAR AND ON THE DATE OF GRANT OF THE REFUND. NO INTEREST SHALL, HOWEVER, BE PAYABLE, IF THE AMOUNT OF REFUND IS LES S THAN 10 PER CENT OF THE TAX DETERMINED ON REGULAR ASSESSMENT; (B) IF THE REFUND IS OUT OF ANY TAX, OTHER THAN ADVANCE TAX OR TAX DEDUCTED AT SOURCE OR PENALTY, INTEREST SHALL BE PAYABLE FOR THE PERIOD STARTING FROM THE DATE OF PAYMENT OF SUCH TAX OR PENALTY AND ENDING ON THE DATE OF THE GRANT OF THE REFUND. (REFER TO EXAMPLE III IN PARA 11.8).' (EMPHASIS SUPPLIED) THE INFERENCES TO BE DRAWN FROM THE BOARD'S CIRCULA R IS CLEAR THAT IF REFUND IS OUT OF ANY TAX OTHER THAN OUT OF ADVAN CE-TAX OR TAX DEDUCTED AT SOURCE, INTEREST SHALL BE PAYABLE F ROM THE DATE OF PAYMENT OF TAX AND ENDING ON THE DATE OF THE GRANT OF REFUND. IT IS TO BE NOTED THAT NOWHERE DOES THE CBDT EVEN REMOTEL Y SUGGEST THAT INTEREST IS NOT PAYABLE BY THE DEPARTM ENT ON CIPLA LTD. ITA NO.3090/MUM/2015 8 SELF-ASSESSMENT TAX. MOREOVER, THE AMOUNT PAID UNDE R SECTION 140A OF THE ACT ON SELF ASSESSMENT IS AN AM OUNT PAYABLE AS AND BY WAY OF THE TAX AFTER NOTICING THA T THERE IS LIKELY TO BE SHORTFALL IN THE TAXES ALREADY PAID. T HUS THIS PAYMENT IS CONSIDERED TO BE A TAX UNDER THE AFORESA ID PROVISION. 8. THE CONTENTION OF REVENUE IS THAT NO INTEREST AT AL L IS PAYABLE TO THE PETITIONER UNDER SECTION 244A(1) (A) AND (B) OF THE ACT UNLESS THE AMOUNTS HAVE BEEN PAID AS TAX. I T WOULD NOT COVER CASES WHERE THE PAYMENT IS GRATUITOUS AS IS EVIDENT FROM THE FACT THAT THE PETITIONER IN ITS COMPUTATIO N AFTER PAYING TAX ON SELF ASSESSMENT OF RS.2.60 CRORES SEEKS A RE FUND OF RS.47 LACS. ACCORDING TO HIM IT HAS TO BE REFUND OF AMOUN TS PAID AS TAX. WE FIND THAT SECTION 244A(1) OF THE ACT COMMEN CES WITH THE WORD 'WHEN REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE UNDER THIS ACT...'. SUB-CLAUSE (B) THEREOF COMMENCES WITH THE WORDS 'IN ANY OTHER CASE....'. THE WORDS U SED IN SECTION 244A(1) OF THE ACT ARE CLEAR INASMUCH AS IT PROVIDES THAT REFUND OF ANY AMOUNT THAT BECOME DUE TO ANY AS SESSEE UNDER THE ACT WILL ENTITLE THE ASSESSEE TO INTEREST . IN ANY CASE IN THE PRESENT FACTS, THE AMOUNT ON WHICH THE REFUND I S BEING CLAIMED WAS ORIGINALLY PAID AS TAX ON SELF-ASSESSME NT UNDER SECTION 140A OF THE ACT AND EVIDENCE OF THE SAME IN THE FORM OF CHALLAN WAS ENCLOSED TO THE RETURN OF INCOME. IN FA CT WHEN THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER ON 31 DECEMBER 1996, HE ACCEPTED THE ENTIRE AMOUNT PAID AS TAX ON SELF ASSESSMENT AS A PAYMENT OF TAX. ONE MORE FEATURE TO BE NOTICED IS THAT WHEN ANY REFUND BECOMES DUE TO AN ASSESSEE OUT OF TAX PAID, IT BECOMES SO ONLY AFTER HOLDING THAT IT IS N OT THE TAX PAYABLE. THUS WE FIND NO SUBSTANCE IN THE FIRST OBJ ECTION OF THE REVENUE THAT THE AMOUNT PAID AS TAX ON SELF ASSESSM ENT IS NOT TAX AND THEREFORE NO INTEREST CAN BE GRANTED ON REFUND OF SUCH AMOUNTS WHICH ARE NOT TAX. 9. THE NEXT OBJECTION OF THE REVENUE IS THAT THE DECISION OF THE APEX COURT IN TATA CHEMICALS (SUPRA) IS INAPPLICABLE TO THE PRESENT FACTS. THE CASE BEFORE THE APEX COURT IN TATA CHEMICALS (SUPRA) AROSE AS THE QUANTUM OF TAX DEDUCTED BY IT CONSEQUENT TO THE ORDER PASSED BY TH E ASSESSING OFFICER DIRECTING IT TO DEDUCT TAX ON AMO UNTS BEING REMITTED ABROAD, IT WAS FOUND IN APPEAL THAT THE PAYMENTS MADE WERE IN THE NATURE OF REIMBURSEMENT A ND THEREFORE NOT A PART OF INCOME OF THE PARTY TO WHOM IT IS BEING REMITTED FOR THE PURPOSES OF DEDUCTION OF TAX AT SO URCE. CIPLA LTD. ITA NO.3090/MUM/2015 9 THEREFORE TATA CHEMICALS SOUGHT REFUND OF THE AMOUN T PAID IN EXCESS ALONG WITH INTEREST THEREOF. THIS THE SUPREM E COURT GRANTED WHILE MAKING THE FOLLOWING OBSERVATIONS WIT H REGARD TO THE LIABILITY TO PAY INTEREST: 'A 'TAX REFUND' IS A REFUND OF TAXES WHEN THE TAX LIABILITY IS LESS THAN THE TAX PAID. AS PER THE OLD SECTION AN ASSESSEE WAS ENTITLED FOR PAYMENT OF INT EREST ON THE AMOUNT OF TAXES REFUNDED PURSUANT TO AN ORDE R PASSED UNDER THE ACT, INCLUDING THE ORDER PASSED IN AN APPEAL. IN THE PRESENT FACT SCENARIO, THE DEDUCTOR/ASSESSEE HAD PAID TAXES PURSUANT TO A SPECIAL ORDER PASSED BY THE ASSESSING OFFICER/INCOME TAX OFFICER. IN THE APPEAL FILED AGA INST THE SAID ORDER THE ASSESSEE HAS SUCCEEDED AND A DIRECTION IS ISSUED BY THE APPELLATE AUTHORITY TO REFUND THE TAX PAID. THE AMOUNT PAID BY THE RESIDEN T/ DEDUCTOR WAS RETAINED BY THE GOVERNMENT TILL A DIRECTION WAS ISSUED BY THE APPELLATE AUTHORITY TO REFUND THE SAME. WHEN THE SAID AMOUNT IS REFUNDED IT SHOULD CARRY INTEREST IN THE MATTER OF COURSE. A S HELD BY THE COURTS WHILE AWARDING INTEREST, IT IS A KIND OF COMPENSATION OF USE AND RETENTION OF THE MONEY COLLECTED UNAUTHORIZEDL Y BY THE DEPARTMENT. WHEN THE COLLECTION IS ILLEGAL, THERE IS CORRESPONDING OBLIG ATION ON THE REVENUE TO REFUND SUCH AMOUNT WITH INTEREST IN AS MUCH AS THEY HAVE RETAINED AND ENJOYED THE MONEY DEPOSITED. EVEN THE DEPARTMENT HAS UNDERSTOOD THE OBJECT BEHIND INSERTION OF SECTION 244A, AS THAT, A N ASSESSEE IS ENTITLED TO PAYMENT OF INTEREST FOR MON EY REMAINING WITH THE GOVERNMENT WHICH WOULD BE REFUNDED. THERE IS NO REASON TO RESTRICT THE SAME T O AN ASSESSEE ONLY WITHOUT EXTENDING THE SIMILAR BENEFIT TO A RESIDENT/ DEDUCTOR WHO HAS DEDUCTED TAX AT SOURCE AND DEPOSITED THE SAME BEFORE REMITTING THE AMOUNT PAYABLE TO A NON-RESIDENT/ FOREIGN COMPANY. PROVIDING FOR PAYMENT OF INTEREST IN CASE OF REFUND OF AMOUNTS PAID AS TAX OR DEEMED TAX OR ADVANCE TAX IS A METHOD NOW STATUTORILY ADOPTED BY FISCAL LEGISLATION TO ENSURE THAT THE AFORESAID AMOUNT OF TAX WHICH HAS BEEN DULY PAID IN PRESCRIBE D TIME AND PROVISIONS IN THAT BEHALF FORM PART OF THE RECOVERY MACHINERY PROVIDED IN A TAXING STATUTE. CIPLA LTD. ITA NO.3090/MUM/2015 10 REFUND DUE AND PAYABLE TO THE ASSESSEE IS DEBT- OWED AND PAYABLE BY THE REVENUE. THE GOVERNMENT, THERE BEING NO EXPRESS STATUTORY PROVISION FOR PAYM ENT OF INTEREST ON THE REFUND OF EXCESS AMOUNT/TAX COLLECTED BY THE REVENUE, CANNOT SHRUG OFF ITS APPARENT OBLIGATION TO REIMBURSE THE DEDUCTORS LAWFUL MONIES WITH THE ACCRUED INTEREST FOR THE PER IOD OF UNDUE RETENTION OF SUCH MONIES. THE STATE HAVING RECEIVED THE MONEY WITHOUT RIGHT, AND HAVING RETAINED AND USED IT, IS BOUND TO MAKE THE PARTY GOOD, JUST AS AN INDIVIDUAL WOULD BE UNDER LIKE CIRCUMSTANCES. THE OBLIGATION TO REFUND MONEY RECEIVED AND RETAINED WITHOUT RIGHT IMPLIES AND CARRIES WITH IT THE RIGHT TO INTEREST. WHENEVER MON EY HAS BEEN RECEIVED BY A PART Y WHICH EX AEQUO ET BONO OUGHT TO BE REFUNDED, THE RIGHT TO INTEREST FOLLOWS , AS A MATTER OF COURSE. IN THE PRESENT CASE, IT IS NOT IN DOUBT THAT THE PAYMENT OF TAX MADE BY RESIDENT/ DEPOSITOR IS IN EXCESS AND THE DEPARTMENT CHOOSES TO REFUND THE EXCESS PAYMENT OF TAX TO THE DEPOSITOR. WE HAVE HEL D THE INTEREST REQUIRES TO BE PAID ON SUCH REFUNDS. T HE CATECHIZE IS FROM WHAT DATE INTEREST IS PAYABLE, SI NCE THE PRESENT CASE DOES NOT FALL EITHER UNDER CLAUSE (A) OR (B) OF SECTION 244A OF THE ACT. IN THE ABSENCE O F AN EXPRESS PROVISION AS CONTAINED IN CLAUSE (A), IT CA NNOT BE SAID THAT THE INTEREST IS PAYABLE FROM THE 1ST O F APRIL OF THE ASSESSMENT YEAR. SIMULTANEOUSLY, SINCE THE SAID PAYMENT IS NOT MADE PURSUANT TO A NOTICE ISSUED UNDER SECTION 156 OF THE ACT, EXPLANATION TO CLAUSE (B) HAS NO APPLICATION. IN SU CH CASES, AS THE OPENING WORDS OF CLAUSE (B) SPECIFICALLY REFERRED TO 'AS IN ANY OTHER CASE', THE INTEREST IS PAYABLE FROM THE DATE OF PAYMENT OF TAX . THE SEQUEL OF OUR DISCUSSION IS THE RESIDENT/DEDUCT OR IS ENTITLED NOT ONLY THE REFUND OF TAX DEPOSITED UNDER SECTION 195(2) OF THE ACT, BUT HAS TO BE REFUNDED WITH INTEREST FROM THE DATE OF PAYMENT OF SUCH TAX.' EMPHASIS SUPPLIED. FROM THE AFORESAID OBSERVATIONS OF THE APEX COURT IN TATA CHEMICALS, IT WOULD BE CLEAR THAT THE REQUI REMENT TO PAY CIPLA LTD. ITA NO.3090/MUM/2015 11 INTEREST ARISES WHENEVER AN AMOUNT IS REFUNDED TO A N ASSESSEE AS IT IS A KIND OF COMPENSATION FOR USE AN D RETENTION OF MONEY COLLECTED BY THE REVENUE. 10. THE ONLY DISTINCTION BEING MADE IN THE PRESENT FACTS AND THOSE OF APEX COURT DECISION IN TATA CHEM ICALS IS THAT THE AMOUNT PAID AS TAX ON SELF ASSESSMENT WAS PAID VOLUNTARILY IN THE PRESENT CASE WHILE IN THE CASE O F TATA CHEMICALS LTD. (SUPRA) THE TAX WAS DEDUCTED AT A HIGHER RATE IN VIEW OF THE ORDER PASSED BY THE AUTHORITY U NDER THE ACT. WE ARE UNABLE TO APPRECIATE THIS DISTINCTION. THIS IS FOR THE REASON THAT WHEN AN ASSESSEE PAYS TAX EITHER AS ADVANCE TAX OR ON SELF ASSESSMENT, IT IS PAID TO DISCHARGE AN OBLIGATION UNDER THE ACT. NOT COMPLYING WITH THE OBLIGATION UN DER THE ACT VISITS CONSEQUENCES TO AN ASSESSEE JUST AS NON COMP LIANCE OF ORDERS PASSED BY AUTHORITIES UNDER THE ACT WOULD. T HUS THERE IS NO VOLUNTARY PAYMENT OF TAX ON SELF ASSESS MENT AS CONTENDED BY THE REVENUE. 11. THE FURTHER SUBMISSION OF MR. PINTO THAT IN VIEW OF THE EXPLANATION TO SECTION 244A(1)(B)OF THE ACT THE SAME WOULD APPLY ONLY WHEN THE AMOUNTS ARE PAID CONSEQUE NT TO A NOTICE ISSUED UNDER SECTION 156 OF THE ACT. NOT OTH ERWISE. THIS VERY SUBMISSION WAS ADVANCED BY THE REVENUE BE FORE THE APEX COURT IN THE CASE OF TATA CHEMICALS (SUPRA). IN FACT, THE FIRST APPELLATE AUTHORITY IN THE CASE OF TATA CHEMICALS (SUPRA) HAD REJECTED THE PETITIONER'S CLAIM FOR INT EREST ON THE GROUND THAT IN VIEW OF THE EXPLANATION APPEN DED TO SECTION 244A(B) OF THE ACT, REFUND OF ANY AMOUNT UN DER THE AFORESAID PROVISION COULD ONLY BE IN RESPECT OF REF UND OF EXCESS PAYMENT MADE UNDER SECTION 156 OF THE ACT. T HE AFORESAID INTERPRETATION WAS NEGATIVED IN THE SECON D APPEAL BY THE TRIBUNAL AS WELL AS BY THE HIGH COURT AND THE A PEX COURT. 12. SIMILARLY, THE NEXT CONTENTION URGED ON BEHALF OF THE REVENUE THAT THE PAYMENT OF INTEREST SHOULD ONLY BE MADE FROM THE DATE OF NOTICE UNDER SECTION 156 OF THE ACT IS ISSUED TO THE PETITIONER IN TERMS OF EXPLANA TION TO SECTION 244A(1) (B) OF THE ACT CANNOT BE ACCEPTED FOR TWO R EASONS. FIRSTLY, AS HELD BY THE SUPREME COURT IN TATA CHEMICALS (SUPRA), THE EXPLANATION WOULD HAVE EFFECT ONLY WHERE PAYMEN TS OF TAX HAVE BEEN MADE PURSUANT TO NOTICE UNDER SECTION 156 OF THE ACT. IN THIS CASE, THE PAYMENT HAS NOT BEEN MADE PURSUAN T TO ANY CIPLA LTD. ITA NO.3090/MUM/2015 12 NOTICE OF DEMAND BUT PRIOR TO THE FILING OF THE RET URN OF INCOME IN ACCORDANCE WITH SECTION 140A OF THE ACT. SECONDLY, THE PROVISIONS OF SECTION 244A(1) (B) VERY CLEARLY MAND ATE THAT THE REVENUE WOULD PAY INTEREST ON THE AMOUNT REFUND ED FOR THE PERIOD COMMENCING FROM THE DATE THE PAYMENT OF TAX IS MADE TO THE REVENUE UPTO THE DATE WHEN REFUND IS GRANTED TO THE REVENUE. THUS, THE SUBMISSION OF MR. PINTO THAT THE INTEREST IS PAYABLE NOT FROM THE DATE OF P AYMENT BUT FROM THE DATE OF DEMAND NOTICE TINDER SECTION 156 O F THE ACT CANNOT BE ACCEPTED AS OTHERWISE THE LEGISLATION WOU LD HAVE SO PROVIDED IN SECTION 244A 1(B) OF THE ACT, RATHER TH EN HAVING PROVIDED FROM THE DATE OF PAYMENT OF THE TAX. 13. WE FIND SUPPORT FOR OUR VIEW FROM THE DECISIONS REN DERED BY KARNATAKA HIGH COURT IN COMMISSIONER OF INCOME-T AX V/S VIJAYA BANK [2011] 338 ITR PAGE 489 AND DELHI HIGH COURT IN COMMISSIONER OF INCOME-TAX V/S SUTLEJ INDUSTRIES LTD. [2010] 325 ITR PAGE 331. IN BOTH CA SES IN IDENTICAL CIRCUMSTANCES IT WAS HELD THAT INTEREST I S PAYABLE FROM THE DATE OF PAYMENT OF THE TAX ON SELF ASSESSMENT T O THE DATE OF REFUND OF THE AMOUNTS UNDER SECTION 244A OF THE ACT . ACCORDINGLY, FOR ALL THE AFORESAID REASONS, WE SET ASIDE THE IMPUGNED ORDER DATED 28 SEPTEMBER 1999. WE DIRECT T HE ASSESSING OFFICER TO COMPUTE THE INTEREST PAYABLE F ROM THE DATE OF PAYMENT ON SELF- ASSESSMENT TAX I.E. 31 AUGUST 1 994 TILL THE DATE OF REFUND I.E. 24 OCTOBER 1998. THE REVENUE IS DIRECTED TO COMPUTE THE INTEREST DUE TO THE PETITIONER AND P AY THE SAME WITHIN SIX WEEKS FROM TODAY. 14. PETITION ALLOWED. NO ORDER AS TO COSTS. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT THE HON'BL E JURISDICTIONAL HIGH COURT IN THE CASE OF THE STOCK HOLDINGS CORPORATION OF INDIA LTD. VS CIT (W.P. NO.823 OF 20 00), ORDER DATED 17/11/2014, AFTER CONSIDERING VARIOUS JUDICIA L CIPLA LTD. ITA NO.3090/MUM/2015 13 PRONOUNCEMENTS INCLUDING UNION OF INDIA VS TATA CHE MICALS (2014) 363 ITR 658, CBDT CIRCULAR NO.549 DATED 30/10/1989, PROVISION OF THE ACT, SECTION 156 OF TH E ACT AND EXPLANATION TO SECTION 244A(1)(B) OF THE ACT, THE D ECISION FROM HON'BLE KARNATAKA HIGH COURT IN VIJAYA BANK (2 011) 338 ITR 489 (KARNATAKA) AND HON'BLE DELHI HIGH COUR T IN CIT VS SUTLEJ INDUSTRIES (2010) 325 ITR 331 (DEL.) MADE AN ELABORATE DISCUSSION AND FINALLY HELD THAT INTEREST IS PAYABLE FROM THE DATE OF PAYMENT OF TAX ON SELF ASSESSMENT TO THE DATE OF REFUND OF THE AMOUNTS U/S 244A OF THE ACT, DUE TO THE ASSESSEE, AND DECIDED IN FAVOUR OF THE ASSESSEE . RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS, WE DIRECT THE ASSESSING OFFICER TO FOLLOW THE AFORESAID ORDER OF THE HON'BLE HIGH COURT. THUS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL), RESULTING INTO DISMISSAL OF APPEAL OF THE REVENUE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 16/03/2017. SD/- SD/- ( N.K. PRADHAN ) (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; / DATED : 29/03/2017 F{X~{T? P.S / 0' CIPLA LTD. ITA NO.3090/MUM/2015 14 !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. 1234 / THE APPELLANT 2. 534 / THE RESPONDENT. 3. 6 6 * 7% ( 12 ) / THE CIT, MUMBAI. 4. 6 6 * 7% / CIT(A)- , MUMBAI 5. 8'9% , 6 12-1 : , * / DR, ITAT, MUMBAI 6. #; / GUARD FILE. ! / BY ORDER, 582%% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , * / ITAT, MUMBAI,