DCIT, Saharanpur V. M/s Herbs India (P) Ltd., Bengalore

ITA 4960/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58432 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-01-2012
• Assessment Year: 1990-1991
• Appeal Filed On: 12-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Keywords: Set aside
• Section: 244A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI A.N. PAHUJA ITA NO. 4960/DEL/2010 ASSTT. YR: 1990-91 DCIT, CIRCLE, VS. M/S HERBS INDIA (P) LTD., SAHARANPUR. SHARDA NAGAR, SAHARANPUR PAN/GIR NO. AAACH5083K (APPELLANT) ( RESPONDENT ) APPELLANT BY : SHRI SALIL MISHRA SR. DR RESPONDENT BY : NONE O R D E R PER R.P. TOLANI, J.M : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DAT ED 9-8-2010, RELATING TO A.Y. 1990-91. FOLLOWING GROUNDS ARE RAI SED: 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CAN CELING THE ORDER UNDER SECTION 154 PASSED BY THE AO BY IGNORIN G THE FACT THAT IN THE ORDER PASSED UNDER SECTION 154, THE AMO UNT OF REFUND DID NOT ARISE AGAINST ANY PAYMENT BUT IT WAS THE AM OUNT U/S 244A OF THE I.T. ACT, 1961 WHICH IS ONLY THE INTERE ST AND AS SUCH NO INTEREST IS PAYABLE ON THE SAID AMOUNT. 2. THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THA T OF AO BE RESTORED. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE ISSUE OF NOTICE FOR HEARING. WE PROCEED TO DISPOSE OF THE APPEAL, EX PA RTE, QUA THE ASSESSEE, ON MERITS AND IN THAT PROCESS WE HAVE HEARD LEARNED DR AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ITA 4960/DEL/10 HERBS INDIA (P) LTD. 2 3. CIT(A) ALLOWED ASSESSEES CLAIMED OF INTEREST U/ S 244A AMOUNTING TO RS. 2,41,836/- BY FOLLOWING OBSERVATIONS: 4. THE FACTS OF THE CASE AND SUBMISSIONS MADE BY T HE AR FOR THE APPELLANT HAVE BEEN CAREFULLY CONSIDERED. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE AO HAD REJECT ED APPLICATION U/S 154 OF THE ACT ON THE GROUND THAT T HE AMOUNT OF REFUND DID NOT ARISE AGAINST ANY PAYMENT BUT IT WAS THE AMOUNT OF INTEREST U/S 244A. INTEREST ON REFUNDS IS STIPUL ATED U/S 244A OF THE ACT WHICH READS AS UNDER:- 244A(1) WHERE REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE UNDER THIS ACT, HE SHALL, SUBJE CT 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 . THUS THE INCOME-TAX ACT DOES NOT SPECIFY WHETHER IN TEREST ON THE DELAY IN PAYMENT OF INTEREST IS ALSO PAYABLE AL SO BY WAY OF COMPENSATION. HOWEVER, THERE ARE UMPTEEN COURT RULI NGS ON THE IMPUGNED ISSUED. IN THE SUBMISSION MADE, THE APPELL ANT AHS ALSO CITED VARIOUS CASE LAWS OF THE HONBLE SUPREME COURT HIGH COURTS AND ITAT WHICH HAVE BEEN GONE THROUGH. THE HONBLE SUPREME COURT IN THE CASE OF SANDVIK ASIA L TD. VS. CIT AND OTHERS (2006) 280 ITR 642 HAS HELD THAT IT IS THE LIABILITY OF THE GOVERNMENT ON GENERAL PRINCIPLES T O PAY INTEREST ON SUMS WRONGFULLY RETAINED WHICH INCLUDES LIABILIT Y TO PAY INTEREST ON INTEREST WRONGFULLY RETAINED. IN THE CA SE QUOTED SUPRA, THE TRIBUNAL AT THE INSTANCE OF THE REVENUE REFERRED CERTAIN QUESTIONS OF LAW FOR CONSIDERATION BY THE H IGH COURT. THE HIGH COURT, WHILE CONSTRUING THE EXPRESSION AM OUNT IN THE EARLIER PART OF SECTION 244(1A) HELD THAT IT WO ULD REFER NOT ONLY TO THE TAX BUT ALSO THE INTEREST AND THE EXPRE SSION AMOUNT IS A NEUTRAL EXPRESSION AND IT CANNOT BE LIMITED TO THE TAX PAID IN PURSUANCE OF THE ORDER OF ASSESSMENT. THE AOS OBSERVATION IN THE ORDER PASSED U/S 154 TH AT THE AMOUNT OF REFUND DID NOT ARISE AGAINST ANY PAYMENT BUT IT WAS THE AMOUNT U/S 244A IS IN A WAY IS PARTLY CORRECT B UT IN VIEW OF ITA 4960/DEL/10 HERBS INDIA (P) LTD. 3 THE FACT THAT THE EXPRESSION AMOUNT USED IN THE S ECTION IS A NEUTRAL EXPRESSION AND AS PER THE RATIO LAID DOWN B Y THE SUPREME COURT IN THE CASE CITED SUPRA, IT IS HELD T HAT THE AO WAS NOT JUSTIFIED IN NOT ALLOWING INTEREST U/S 244A ON INTEREST AMOUNT OF RS. 2,41,836/- FOR THE IMPUGNED PERIOD AN D THEREBY REJECTING THE APPLICATION FILED BY THE APPELLANT U/ S 154. THE ORDER PASSED BY THE AO U/S 154 IS CANCELLED. THE AO IS DIRECTED TO ALLOW CONSEQUENTIAL RELIEF TO THE APPELLANT. 4. LEARNED DR IS HEARD WHO SUPPORTS THE ORDER OF AO , REJECTING THE ASSESSEES APPLICATION U/S 154. 5. IN OUR VIEW CIT(A)S ORDER CALLS FOR NO INTERFER ENCE AS THE SAME RELIED ON THE ORDER OF HONBLE SUPREME COURT IN THE CASE O F SANDVIK ASIA LTD (SUPRA), WHICH LAYS DOWN THE PROPOSITION THAT REVEN UE IS LIABLE TO PAY INTEREST U/S 244A FOR DELAYED GRANT OF THE REFUND INCLUDING THE AMOUNT OF INTEREST, IF ANY, INCLUDED IN THE RETURN. IN VIEW THEREOF, WE DI SMISS THE REVENUES APPEAL. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 04-01-2012. SD/- SD/- ( A.N. PAHUJA ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04-01-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR