DCIT 2(3), MUMBAI V. TATA STEEL LTD, MUMBAI

ITA 6442/MUM/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9817 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 1985-1986
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJ KAPADIA
• Keywords: Rectification of order; Question of law
• Section: 143(3); 244A; 154

Judgement Text

, INCOME-TAX APPELLATE TRIBUNAL -FBENCH MUMBAI , , , BEFORE S/SHRI RAJENDRA,ACCOUNTANT MEMBER AND RAM LAL NEGI,JUDICIAL MEMBER ./I.T.A./6442/MUM/2014, /ASSESSMENT YEAR: 1985-86 DCIT-2(3) ROOM NO.552, 5 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. VS. M/S.TATA STEEL LTD. BOMBAY HOUSE, 24, HOMI STREET FORT, MUMBAI-400 001. PAN:AAACT 2803 M ( /APPELLANT ) ( / RESPONDENT ) ./I.T.A./6755/MUM/2014, /ASSESSMENT YEAR: 1985-86 M/S.TATA STEEL LTD. FORT, MUMBAI-400 001. VS. DCIT-2(3) MUMBAI-400 020. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: MS. S. PADMAJA-DR ASSESSEE BY: SHRI RAJ KAPADIA / DATE OF HEARING: 04.05.2017 / DATE OF PRONOUNCEMENT: 26.07.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS,DATED 02.07.2014,OF THE CIT( A)-6,MUMBAI THE ASSESSEE AND THE ASSESSING OFFICER(AO)HAVE FILED CROSS-APPEALS FOR THE ABOVE-MENTIONED ASSESSMENT YEAR. ASSESSEE,A PUBLIC LIMITED COMPANY,ENGAGED IN THE BU SINESS OF MANUFACTURE AND SALE OF STEEL FILED HIS RETURN OF INCOME ON 10/12/1985,DECLARING TOTAL INCOME OF RS.14.85 CRORES.THE AO COMPLETED THE ASSESSMENT,U/S.143(3) OF THE ACT,ON 2 8/03/1988. 2. VIDE ITS APPLICATION DATED 01/09/2016,THE ASSESSEE HAS REQUESTED FOR ADMISSION OF ADDITIONAL GROUNDS.IN ITS APPLICATION IT WAS STATED THAT THESE GROUNDS INVOLVED PURE QUESTION OF LAW, THAT SAME DID NOT REQUIRE THE BRINGING ON RECORD OR ESTA BLISHMENT OF ANY NEW FACTS.DURING THE COURSE OF HEARING BEFORE US,THE AUTHORISED REPRESEN TATIVE(AR)STATED THAT BOTH THE ADDITIONAL GROUNDS WERE PURE QUESTION OF LAW. THE DEPARTMENTAL REPRESENTATIVE(DR) LEFT THE ISSUE TO THE DISCRETION OF THE BENCH.AFTER GOING THROUGH THE ADDITIONAL GROUNDS ,WE FIND THAT SAME DO NOT REQUIRE ESTABLISHING OF NEW FACTS.THEREFORE,WE ADMIT ADDITIONAL GROUNDS RAISED BY THE ASSESSEE. 3. EFFECTIVE GROUND OF APPEAL IS ABOUT WITHDRAWAL OF I NTEREST,U/S.244 OF THE ACT,AMOUNTING TO RS.23.91 CRORES,FOR THE YEAR UNDER CONSIDERATION.IN THIS CASE ASSESSMENT ORDER,U/S.143 (3) WAS COMPLETED ON 28/03/1988,WHEREBY THE AO DETERMINED T HE TOTAL INCOME OF THE ASSESSEE AT 6442/M/14&6755/M/14(85-86) TATA STEEL LTD. 2 RS.26,49,72,490/-AND RAISED A NET ADDITIONAL DEMAND OF RS.1.48 CRORES.THE ORDER WAS SUBJECT MATTER OF VARIOUS MODIFICATIONS AS UNDER: SR.NO. NATURE OF A.O.S ORDER DATE OF AO'S ORDER 1. 2. 3. 1. ORDER GIVING EFFECT TO CIT(A)S ORDER DT.21.02.2003 ( 1ST CONSEQUENTIAL ORDER ) 18.03.2005 2 ORDER U/S.154 OF THE I.T. ACT, 1961 ( 1ST RECTIFICATION ) 11.11.2005 3. ORDER GIVING EFFECT TO ITATS ORDER DT.27.02.200 9 ( 2ND CONSEQUENTIAL ORDER ) 26.03.2010 4. ORDER U/S.154 OF THE I.T. ACT, 1961 ( 2ND RECTIFICATION ) 07.12.2011 BY THE 2 ND CONSEQUENTIAL ORDER OF ITAT THE ASSESSEE WAS GRANT ED INTEREST U/S.244 (1A) OF RS. 19.12 CRORES.DISSATISFIED WITH THE ORDER OF THE AO, THE ASSESSEE FILED AN APPLICATION FOR RECTIFICATION OF THE SECOND CONSEQUENTIAL ORDER,DAT ED 26.03.2010 AND STATED THAT IT WAS ENTITLED TO FURTHER INTEREST OF RS.47.02 CRORES.THE AO VIDE HIS ORDER DTD.07.12.2011 DISPOSED OFF THE RECTIFICATION APPLICATION. LATER ON VIDE HIS RECTIF ICATION ORDER,PASSED U/S.154 OF THE ACT,DATED 28.03.2013 THE AO WITHDREW THE INTEREST GRANTED U/S .244 OF THE ACT,AMOUNTING TO RS.23,91,54, 333/-. 4. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PREFERR ED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA)AND MADE ELABORATE SUBMISSIONS.IT REL IED UPON CERTAIN CASE LAWS AND ALSO CHALLENGED THE VALIDITY OF RECTIFICATION ORDER PASS ED ON 28/03/2013.AFTER CONSIDERING THE AVAILABLE MATERIAL THE FAA OBSERVED THAT THE DECISI ONS RELIED UPON BY THE ASSESSEE WERE NOT HELPFUL IN DECIDING THE ISSUE,THAT THE DECISIONS WE RE IN RESPECT OF SUBSTANTIVE ISSUE ARISING FROM THE ORDERS WHICH WERE SOUGHT TO BE RECTIFIED,T HAT IN THE CASE UNDER CONSIDERATION THE ISSUE WAS WITHDRAWAL OF EXCESS INTEREST,THAT INTERE ST GRANTED IN EXCESS COULD BE WITHDRAWN BY A RECTIFICATION ORDER,THAT THE AO HAD RIGHTLY HELD THAT INTEREST GRANTED SHOULD BE WITHIN THE FOUR CORNERS OF THE ACT,THAT THE LEGALITY AND VALID ITY OF THE RECTIFICATION ORDER COULD NOT BE SUBJECT MATTER OF ANY DOUBT,THAT THE ORDER PASSED B Y THE AO WAS NOT WITHOUT JURISDICTION TO RECTIFY A MISTAKE APPARENT FROM THE RECORD.FINALLY, HE REJECTED THE PLEA OF THE ASSESSEE THAT ORDER WAS BAD IN LAW.HE FURTHER OBSERVED THAT THE B ASIC DISPUTE WAS REGARDING EXCESS INTEREST GRANTED BY THE AO U/S.244 AND 214 OF THE ACT. HE RE FERRED TO THE CASE OF HEG LTD. (324/331) OF THE HON'BLE SUPREME COURT AND HELD THAT THE DECI SION SQUARELY APPLIED TO THE FACTS OF THE CASE, THAT IN THAT MATTER DISPUTE WAS ABOUT INTERES T NOT GRANTED IN RESPECT OF THE AMOUNT OF 6442/M/14&6755/M/14(85-86) TATA STEEL LTD. 3 TDS (OF RS. 45.73 LAKHS), THAT REFUND WAS GRANTED A FTER A PERIOD OF 57 MONTHS, THAT HONBLE COURT HAD DECIDED THAT THERE COULD BE NO CLAIM OF G RANT OF COMPOUND INTEREST OR (INTEREST ON INTEREST ) U/S.244A OR 244 OF THE ACT, THAT THE AO HAD CALCULATED EXCESS INTEREST AND HAD WITHDRAWN IT, THAT THE FACTS AND FIGURES WERE NOT A VAILABLE IN THE CHART PREPARED BY AO, THAT THE CORRECTNESS OF COMPUTATION MADE BY THE AO, COUL D NOT BE COMMENTED UPON, THAT THE ASSESSEE HAD HIGHLIGHTED CERTAIN DISCREPANCIES IN ITS SUBMISSIONS,THAT SAME WERE TO BE VERIFIED FROM THE RECORDS.HE DIRECTED THE AO TO FOL LOW THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF HEG LTD.(SUPRA), AND RECOMPUTE D THE EXCESS INTEREST IF ANY.HE ALSO ISSUED DIRECTION TO THE AO THAT WHILE FOLLOWING JUD GMENT OF HON'BLE SUPREME COURT AND THE INTEREST GRANTED U/S.244 ALONG WITH REFUNDS SHOULD NOT BE DEDUCTED WHILE COMPUTING THE PRINCIPAL AMOUNT ON WHICH THE ASSESSEE WOULD BE ENT ITLED TO INTEREST FOR SUBSEQUENT PERIOD. 5. DURING THE COURSE OF HEARING BEFORE US, THE AR ARG UED THAT INITIATION OF PROCEEDINGS ON ONE GROUND AND CONCLUSION OF SUCH PROCEEDINGS ON ANOTHE R GROUND RENDERED THE CONCLUSION ILLEGAL AND WITHOUT JURISDICTION,THAT THE RECTIFICATION ORD ER WAS INITIATED FOR WITHDRAWAL OF INTEREST U/S.244(1A), THAT THE AO WITHDREW THE INTEREST,WHIL E PASSING THE ORDER U/S. 154 OF THE ACT U/S.244A(3) OF THE ACT,THAT THE FAA HAD NOT PASSED SPEAKING ORDER WITH REGARD TO GROUND NO.1-6,THAT IN ALL THE SIX GROUNDS DIFFERENT ARGUME NTS WERE ADVANCED, THAT THERE WAS NO MISTAKE IN THE ORDER OF THE AO WHICH COULD HAVE BEE N RECTIFIED INVOKING THE PROVISIONS OF SECTION 154 I.E. THE ORDER GRANTING REFUND TO THE A SSESSEE,THAT THE INTEREST WAS GRANTED IN ACCORDANCE WITH THE THREE JUDGMENTS OF THE HON'BLE SUPREME COURT ,THAT NO MISTAKE WAS APPARENT FROM THE RECORD,THAT IT WAS HIGHLY DEBATAB LE ISSUE,THAT THE ORDER PASSED U/S.154 OF ACT,ON 07/12/2011,WAS RESULT OF PROPER APPLICATION OF THE MIND OF THE AO,THAT THE INTEREST HAD BEEN GRANTED UNDER THE PROVISIONS OF SECTION 24 4 OF THE ACT,THAT SUCH INTEREST, ONCE GRANTED,COULD NOT BE WITHDRAWN IN VIEW OF THE FACT THAT THERE EXISTED NO PROVISION IN SECTION 244 ENABLING THE AO TO WITHDRAW THE INTEREST, THAT WITHDRAWAL OF INTEREST WAS PERMISSIBLE SUB SECTION 1A OF SECTION 214 AND S/S.3 OF SECTION 244-A,THAT THE IMPUGNED INTEREST HAD BEEN GRANTED ON WITHHELD REFUNDS, THAT IT WAS NOT A CASE OF INTEREST ON INTERESTS,THAT THE AO HAD WRONGLY HELD THAT IT WAS MERELY A CALCULATION MISTA KE.HE REFERRED TO THE CASES OF HAKIMUDDIN KHAN(40ITR402);MODI INDUSTRIES LTD.(216 ITR 759);HEG LTD.(SUPRA);CIBATUL LTD.(201ITR507);UDAIPUR DISTILLERY CO. LTD.(266 ITR 667);AYOUNUSKUNJU YOUNUS CASHEW INDUSTRIES (IT-569-ITAT-2014-COCH). HE ALSO MADE RE FERENCE TO CASE OF SISTER CONCERN I.E. TATASONS LTD.(ITA/5388 -5394/MUM/2014, AY1985-86 TO 1994-95 AND 1996-97,DTD.1/4/ 6442/M/14&6755/M/14(85-86) TATA STEEL LTD. 4 2016)WHEREIN SIMILAR ISSUE HAD BEEN DELIBERATED UPO N. HE ALSO REFERRED TO THE CASE OF CENTRAL BANK OF INDIA(ITA/3975/MUM/2015-AY 2008-09,DTD.22/7 /2016).THE DR SUPPORTED THE ORDER OF THE FAA. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE BASIC ISSUE TO BE DECIDED IS AS TO WHETHER THE AO H AS RIGHTLY WITHDRAWN THE INTEREST BY HIS ORDER,DATED 28/3/2013.THE AY.UNDER CONSIDERATION IS 1985-86,THEREFORE, WE HAVE TO CONSIDER THE PROVISIONS OF THE ACT PREVALENT AT THAT TIME.WE FIND THAT IN THE CASE OF CIBATUL LTD. (SUPRA),THE MATTER HAS BEEN DECIDED AS UNDER :- 2. FOR THE ASSESSMENT WAS YEAR 1976-77, THE INCOME- TAX OFFICER, BY AN ORDER DATED OCTOBER 16, 1976, PASSED UNDER SECTION 143(3) OF THE INCOME -TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT'), COMPUTED THE TOTAL INCOME OF THE PETITI ONER AT RS. 92,54,730 AND TAX THEREON WAS ASSESSED AT RS. 53,44,670. THE PETITIONER HAD PAID RS. 67,77,554 AS ADVANCE TAX AND TAX DEDUCTED AT SOURCE WAS RS. 909. THEREFORE, THE SUM REFUNDABLE WAS WORKED OUT AT RS. 14,33,856. EARLIER, BY AN ORDER DATED MAY 29, 1976, PASSED UNDER SECTION 141A OF THE ACT, THE INCOME-TAX OFFICER HAD ACTUALLY REFUNDED RS. 18 ,97,404. AS THE AMOUNT ACTUALLY REFUNDED WAS MORE, THE INCOME-TAX OFFICER RAISED A DEMAND FO R RS. 4,63,548. ON THE REFUNDABLE SUM OF RS. 14,33,856, THE PETITIONER WAS GRANTED RS. 14,33 9 AS INTEREST UNDER SECTION 214 OF THE ACT. THE NET SUM PAYABLE BY THE PETITIONER WAS DETERMINE D AT RS. 4,49,209. AGAINST THE ORDER OF ASSESSMENT DATED OCTOBER 16, 1976, THE PETITIONER P REFERRED AN APPEAL TO THE COMMISSIONER OF INCOME-TAX (APPEALS). IT WAS PARTLY ALLOWED. GIV ING EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME-TAX, THE INCOME-TAX OFFICER REVISED THE INCOME OF THE PETITIONER BY REDUCING IT FROM RS. 92,54,730 TO RS. 90,47,200 AND GRANTED RS. 33,124 AS INTEREST UNDER SECTION 244(1A). AS THE PETITIONER WAS NOT GR ANTED ALL THE RELIEFS WHICH HE WANTED, HE PREFERRED AN APPEAL TO THE INCOME-TAX APPELLATE TRI BUNAL. THE TRIBUNAL, BY ITS ORDER DATED AUGUST 19, 1980, GRANTED SOME MORE RELIEFS AND IN P URSUANCE THEREOF, THE INCOME-TAX OFFICER PASSED A CONSEQUENTIAL ORDER ON NOVEMBER 26, 1981, DETERMINING THE REVISED TOTAL INCOME OF THE PETITIONER AT RS. 81,33,650. HE ALSO GRANTED RE FUND OF INCOME-TAX OF RS. 5,27,575. 3. AS NO INTEREST WAS GRANTED ON THE SAID SUM, THE PETITIONER MADE AN APPLICATION TO THE INCOME-TAX OFFICER ON JUNE 7, 1982. IT WAS REJECTED ON THE GROUND THAT THE REFUND WAS NOT IN RESPECT OF TAX PAID AFTER REGULAR ASSESSMENT, BUT W AS RELATABLE TO TAX PAID BY WAY OF ADVANCE TAX AND, THEREFORE, SECTION 244(1A) WAS NOT ATTRACT ED. THE PETITIONER, THEREFORE, PREFERRED AN APPEAL TO THE COMMISSIONER OF INCOME-TAX (APPEALS). IN THE APPEAL, IT WAS CONTENDED THAT THE PETITIONER WAS ENTITLED TO INTEREST UNDER SECTION 2 44(1A) AT LEAST ON RS. 3,43,699 THAT BEING THE AMOUNT PAID ON DEMAND BY THE INCOME-TAX OFFICER AFTER REGULAR ASSESSMENT. THE COMMISSIONER OF INCOME-TAX (APPEALS) ACCEPTED THIS CONTENTION AND PARTLY ALLOWED THE APPEAL. BY THEN THE ASSESSMENT JURISDICTION GOT VES TED IN THE INSPECTING ASSISTANT COMMISSIONER AND, THEREFORE, INSTEAD OF THE INCOME- TAX OFFICER PASSING A CONSEQUENTIAL ORDER, THE INSPECTING ASSISTANT COMMISSIONER, THE R ESPONDENT, PASSED AN ORDER ON NOVEMBER 13, 1984. THE INTEREST GRANTED WAS RS. 1,69,858. XXXXX 5. WHAT IS SUBMITTED BY LEARNED COUNSEL FOR THE PET ITIONER IS THAT THERE IS NO PROVISION IN THE ACT WHEREBY INTEREST PAID UNDER SECTION 244(1A) CAN BE WITHDRAWN EVEN IF, IN FURTHER APPEAL OR OTHER PROCEEDINGS UNDER THE ACT, IT IS FOUND THA T THE AMOUNT OF TAX PAID BY THE ASSESSEE IN PURSUANCE OF AN ORDER OF ASSESSMENT WAS NOT IN EXCE SS OF THE AMOUNT WHICH THE ASSESSEE WAS LIABLE TO PAY UNDER THE ACT OR THAT EXCESS PAID BY HIM WAS LESS THEN WHAT WAS DETERMINED EARLIER. AS THE AMOUNT OF INTEREST PAYABLE UNDER SE CTION 244(1A) IS NOT MADE REFUNDABLE, THE ASSESSING OFFICER DOES NOT HAVE ANY POWER TO WITHDR AW THE SAME. THEREFORE, THE ORDER PASSED 6442/M/14&6755/M/14(85-86) TATA STEEL LTD. 5 BY THE INSPECTING ASSISTANT COMMISSIONER AND THE DE MAND NOTICE ISSUED BY HIM IN THIS CASE ARE WITHOUT ANY AUTHORITY OF LAW AND ILLEGAL. XXXXX 9. WHAT IS SUBMITTED BY LEARNED COUNSEL FOR THE ASS ESSEE IS THAT SECTION 244(1A) DEALS WITH A SITUATION WHERE, AS A RESULT OF AN ASSESSMENT ORDER , THE ASSESSEE IS REQUIRED TO PAY TAX, WHICH IS SUBSEQUENTLY FOUND IN ANY APPEAL OR OTHER PROCEE DING UNDER THE ACT TO BE IN EXCESS OF THE AMOUNT WHICH THE ASSESSEE IS LIABLE TO PAY AS TAX U NDER THE ACT. IN SUCH AS SITUATION, THE CENTRAL GOVERNMENT IS REQUIRED TO PAY TO SUCH ASSES SEE INTEREST ON THE AMOUNT SO FOUND TO BE IN EXCESS. THE INTEREST BECOMES PAYABLE FROM THE DA TE ON WHICH SUCH AMOUNT WAS PAID TO THE DATE ON WHICH THE REFUND IS GRANTED. WE ARE NOT REF ERRING TO THE PROVISO TO SECTION 244(1A), AS THAT IS NOT NECESSARY FOR THE PURPOSE OF THESE CASE S, SUB-SECTION (1A) WAS INSERTED IN SECTION 244 BY THE TAXATION LAWS (AMENDMENT) ACT, 1975, WIT H EFFECT FROM OCTOBER 1, 1975. IT IS SUBMITTED THAT THIS PROVISION CAME TO BE INSERTED I N THE ACT AS THE LEGISLATURE FELT THE NECESSITY OF MAKING SUCH A PROVISION. IT WAS ALSO A WARE OF SECTION 139(8)(B)(II), SECTION 244(1A) AND SECTION 215(3)(II), AS THEY STOOD BEFOR E THEY WERE AMENDED WITH EFFECT FROM APRIL 1, 1985. YET, WHILE INSERTING SUB-SECTION (1A) IN S ECTION 244, THE LEGISLATURE DID NOT THINK IT DESIRABLE TO MAKE A SIMILAR PROVISION IN SECTION 24 4 ALSO. PRESUMABLY, THAT WAS FOR THE PURPOSE OF INDUCING THE ASSESSEES TO PAY THE ASSESS ED TAX IMMEDIATELY. 10. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE REV ENUE THAT LIABILITY TO PAY INTEREST UNDER SECTION 244(1A) DOES NOT ARISE TILL AN ORDER IS PASSED IN FINAL APPEAL OR PROCEEDING AND, AS A RESULT THEREOF, IT IS FOUND THAT THE ASSESSEE HAS PAID MORE THAN THE TAX PAYABLE UNDER THE ACT. THEREFORE, INTEREST PAID TO THE ASSESSEE UNDER SECTION 244(1A) PENDING FINAL DETERMINATION BECOME REFUNDABLE TO THE GOVERNMENT, IF, AS A RESULT OF THE FINAL ORDER, IT IS FOUND THAT THE SAME OR ANY PART THEREOF WAS NOT PAY ABLE TO THE ASSESSEE. IT WAS, THEREFORE, OPEN TO THE ASSESSING OFFICER TO RECOVER THE SAME U NDER SECTION 244(1A), OR UNDER SECTION 143 OR 158 OF THE ACT. 11. IF WE TURN TO SECTION 244(1A), A BARE READING O F THE SAME WOULD MAKE IT CLEAR THAT IT PROVIDES FOR GRANT OF INTEREST TO THE ASSESSEE ON T HE EXCESS AMOUNT OF TAX PAID BY HIM. IT DOES NOT PROVIDE FOR WITHDRAWAL OF INTEREST ALREADY GRAN TED, EVEN WHEN THE ORDER AS A RESULT OF WHICH INTEREST HAD BECOME PAYABLE TO HIM IS SUBSEQU ENTLY REVERSED OR MODIFIED. WHERE THE LEGISLATURE INTENDED TO WITHDRAW OR REDUCE THE AMOU NT OF INTEREST ALREADY GRANTED, A SPECIFIC PROVISION TO THAT EFFECT HAS BEEN MADE. MOREOVER, T HE ACT IS A FIXING STATUTE AND UNLESS IT CONTAINS A PROVISION MAKING SUCH INTEREST REFUNDABL E, THE AUTHORITIES UNDER THE ACT CANNOT WITHDRAW THE INTEREST PAID TO THE ASSESSEE UNDER SE CTION 244(1A) EVEN IF, AS A RESULT OF SUBSEQUENT MODIFICATION OF THE ASSESSMENT ORDER, IT CAN BE SAID THAT THE ASSESSEE HAD PAID MORE THAN THE TAX PAYABLE UNDER THE ACT. AT THE REL EVANT TIME, THERE WAS NO PROVISION EMPOWERING THE ASSESSING OFFICER TO WITHDRAW OR RED UCE THE INTEREST GRANTED UNDER SECTION 244(1A). ANOTHER ASPECT TO BE CONSIDERED IS THAT, U NDER SECTION 244(1A), THE GOVERNMENT IS REQUIRED TO PAY INTEREST TO THE ASSESSEE EVEN THOUG H FURTHER APPEAL OR PROCEEDING IS CONTEMPLATED OR TAKEN BY THE DEPARTMENT. IF THE LEG ISLATURE HAD A FINAL DETERMINATION OF APPEAL OR PROCEEDING IN MIND, IT WOULD HAVE EXPRESS ED ITSELF IN A MANNER WHICH WOULD HAVE BROUGHT OUT ITS INTENTION CLEARLY. THE LEGISLATURE HAS MADE THE CENTRAL GOVERNMENT LIABLE TO PAY INTEREST ON THE AMOUNT FOUND TO BE IN EXCESS AS A RESULT OF AN ORDER PASSED IN APPEAL OR OTHER PROCEEDINGS EVEN WHERE FURTHER APPEAL OR PROC EEDINGS COULD BE RESORTED TO. IF IT HAD INTENDED OTHERWISE, IT WOULD HAVE CERTAINLY MADE A PROVISION FOR STAY OR POSTPONEMENT OF SUCH LIABILITY DURING PENDENCY OF FURTHER APPEAL OR OTHER PROCEEDING. THEREFORE, THE CONTENTION RAISED BY LEARNED COUNSEL FOR THE REVENU E IN THIS BEHALF CANNOT BE ACCEPTED. 12. IT IS ALSO DIFFICULT TO APPRECIATE HOW THE INTE REST PAID UNDER SECTION 244(1A) WOULD BECOME REFUNDABLE UNDER SECTION 143 AS IT STOOD AT THE REL EVANT TIME. 13. EVEN UNDER SECTION 156 OF THE ACT, THE INTEREST PAID UNDER SECTION 244(1A) CANNOT BE ORDERED TO BE REFUNDED. THAT SECTION PROVIDES THAT WHEN ANY TAX, INTEREST, PENALTY, FINE OR ANY OTHER SUM IS PAYABLE IN CONSEQUENCE OF ANY ORDER PA SSED UNDER THE ACT, THE ASSESSING OFFICER SHALL SERVE UPON THE ASSESSEE A NOTICE OF DEMAND IN THE PRESCRIBED FORM SPECIFYING THE SUM SO PAYABLE. THE ORDER WHICH IS CONTEMPLATED BY THAT SE CTION IS THE ORDER WHICH THE ASSESSING OFFICER IS COMPETENT TO PASS UNDER THE ACT. AS POIN TED OUT EARLIER, THERE WAS NO PROVISION IN 6442/M/14&6755/M/14(85-86) TATA STEEL LTD. 6 THE ACT WHICH AUTHORISED AN ASSESSING OFFICER TO PA SS AN ORDER DIRECTING THE ASSESSEE TO REFUND INTEREST PAID TO HIM UNDER SECTION 244(1A). THEREFORE, EVEN UNDER THIS SECTION, THE IMPUGNED ACTION CANNOT BE JUSTIFIED. 14. POSSIBLY REALISING THIS DIFFICULTY AND ALSO FOR MAKING THE LAW MORE COMPLETE AND CLEAR, THE LEGISLATURE HAS NOW INSERTED SECTION 244A IN THE AC T WITH EFFECT FROM APRIL 1, 1989. FOR THE ASSESSMENT YEAR COMMENCING FROM APRIL 1, 1989, AND SUBSEQUENT ASSESSMENT YEARS, THE SAID PROVISION IS NOW APPLICABLE. THAT IS ALSO INDICATIV E OF THE FACT THAT THE LEGISLATURE, REALISING THE NECESSITY OF SUCH A PROVISION IN THE ABSENCE OF WHICH INTEREST PAID UNDER SECTION 244(1A)COULD NOT BE RECOVERED, HAS NOW MADE AN APPR OPRIATE PROVISION. ONE MORE THING THAT IS REQUIRED TO BE STATED IS THAT THE LEARNED ADVOCA TE APPEARING FOR THE ASSESSEE MADE A STATEMENT AT THE BAR THAT, EXCEPT IN THESE TWO CASE S, THE DEPARTMENT HAD NOT TRIED TO RECOVER INTEREST PAYABLE UNDER SECTION 244(1A) FROM ANY ASS ESSEE, EVEN THROUGH SUCH INTEREST WAS PAID TO A LARGE NUMBER OF ASSESSEES. 15. IN THE RESULT, SPECIAL CIVIL APPLICATION NO. 62 74 OF 1985 IS ALLOWED. RULE IS MADE ABSOLUTE ACCORDINGLY WITH NO ORDER AS TO COSTS. THE IMPUGNED ORDER, EXHIBIT 'K', AND THE DEMAND NOTICE, EXHIBIT 'L', IN SO FAR AS THEY RELATE TO TH E INTEREST AMOUNT OF RS. 2,02,782 AND IN SO FAR AS THEY TRY TO WITHDRAW THE BENEFIT GRANTED TO THE PETITIONER UNDER SECTION 244(1A) ARE QUASHED AND SET ASIDE. 6.1. IN THE CASE OF UDAIPUR DISTILLERY CO. LTD.(SUPRA), THE HONBLE RAJASTHAN HIGH COURT ALSO TOOK THE SAME VIEW.IN THE CASE OF B.M. SALGAOCAR & BROTHERS P.LTD. THE TRIBUNAL (54 ITD 34)HAS HELD THAT IN THE ABSENCE OF ANY PROVISIONS O F SECTION 244(A)AT THE RELEVANT TIME FOR WITHDRAWING INTEREST ALREADY ALLOWED UNDER THAT SEC TION CONSEQUENT ON REDUCTION IN AMOUNT OF REFUND ORDER FOR WITHDRAWAL OF INTEREST WAS UNJUSTI FIED.WE FIND THAT IN CASE OF TATASONS LTD., (SUPRA),THE TRIBUNAL HAS DEALT WITH THE ISSUE AS UN DER :- 4. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE BECAME ENTITLED TO HIGHER REFUND THAN ORIGINALLY GRANTED TO IT. THE ASSESSING OFFICE R, WHILE COMPUTING THE INTEREST PAYABLE ON THE ENHANCED AMOUNT OF REFUND, REDUCED THE TAX PORT ION AS WELL AS INTEREST ELEMENT FROM THE TOTAL REFUND DUE AND ACCORDINGLY COMPUTED INTEREST ON THE REMAINING AMOUNT. ACCORDING TO THE ASSESSEE, THE INTEREST ELEMENT SHOULD NOT BE DE DUCTED AND ONLY THE TAX PORTION OF THE REFUND ALONE SHOULD BE DEDUCTED AND ACCORDINGLY THE INTEREST SHOULD BE GRANTED ON THE ENHANCED REFUND. THOUGH THE AO ORIGINALLY ACCEPTED THE SUBMISSIONS OF THE ASSESSEE, BUT BY PASSING THE IMPUGNED RECTIFICATION ORDERS, HE REDUC ED THE AMOUNT OF INTEREST ALREADY GRANTED U/S 244A OF THE ACT. 5. THE LEARNED AR SUBMITTED THAT THE ASSESSING OFFI CER HAD ORIGINALLY GRANTED REFUND TO THE ASSESSEE ALONG WITH INTEREST. SUBSEQUENT TO THE PAS SING OF ORDER BY INCOME TAX APPELLATE TRIBUNAL, THE REFUND DUE TO THE ASSESSEE GOT ENHANC ED. WHILE, CALCULATING THE INTEREST PAYABLE ON THE ENHANCED REFUND, THE ASSESSING OFFICER DEDUC TED THE INTEREST ALREADY GRANTED TO THE ASSESSEE FROM THE TAX PORTION OF THE REFUND DUE AND ACCORDINGLY COMPUTED THE INTEREST ON THE AMOUNT SO REDUCED. IN THE ORIGINAL PROCEEDING THE A SSESSING OFFICER HAD ACCEPTED THE CLAIM OF THE I.T.A. NO.5388-5396/MUM/2014 & I.T.A. 5373-5 377/MUM/2014 A.Y. 1985-86, 1986-87, 1988-89, 1989-90, 1992-93,1994-95 & 1996-97 ASSESSE E THAT THE TAX PORTION OF THE REFUND ALREADY GRANTED ALONE SHOULD BE DEDUCTED FROM THE T OTAL REFUND ARISING UPON GIVING EFFECT TO THE ORDER PASSED BY INCOME TAX APPELLATE TRIBUNAL A ND ACCORDINGLY GRANTED INTEREST. HOWEVER THE ASSESSING OFFICER, THEREAFTER, PASSED T HE IMPUGNED RECTIFICATIONS ORDERS U/S. 154 OF THE ACT AND REDUCED THE AMOUNT OF INTEREST ALREA DY PAID U/S. 244A OF THE ACT FROM THE TAX PORTION OF REFUND DUE AND THE SAME HAS RESULTED IN REDUCTION OF THE INTEREST DUE TO THE ASSESSEE. HE SUBMITTED THAT THE AO SHOULD HAVE DEDU CTED ONLY TAX PORTION OF REFUND ALREADY GRANTED FROM THE TAX PORTION OF TOTAL REFUND DUE. 6. THE LEARNED AR SUBMITTED THAT AN IDENTICAL ISSUE WAS CONFIRMED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF JCIT VS. TATA POWER CO. LTD. (ITA NO.6863/MUM/11 DATED 06.03.2013), WHEREIN THE TRIBUNAL HAD CONFIRMED THE ORDER OF LEARNED CIT(A) IN UPHOLDING 6442/M/14&6755/M/14(85-86) TATA STEEL LTD. 7 THAT THE INTEREST ELEMENT OF REFUND GRANTED EARLIER SHOULD NOT BE DEDUCTED FROM THE REFUND ARISING WHILE GIVING EFFECT TO THE ORDER OF THE APP ELLATE AUTHORITIES. THE LEARNED AR SUBMITTED THAT THE TRIBUNAL HAS PASSED THE ORDER ON 06.03.201 3 AND THE ASSESSING OFFICER HAS PASSED THE IMPUGNED ORDERS ON 13.08.2013. HENCE ON THE DAT E OF PASSING OF IMPUGNED RECTIFICATIONS ORDERS THE ISSUE WAS DEBATABLE ONE. BY PLACING RELI ANCE ON THE DECISION OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF T.S.BALRAM ITO VS. VO LKART BROS. 82 ITR 50(SC), THE LEARNED AR SUBMITTED THAT THE DEBATABLE ISSUE WILL NOT FALL UNDER THE DEFINITION OF 'MISTAKES APPARENT FROM RECORD' AND HENCE SUCH I.T.A. NO.5388-5396/MUM /2014 & I.T.A. 5373-5377/MUM/2014 A.Y. 1985-86, 1986-87, 1988-89, 1989-90, 1992-93,19 94-95 & 1996-97 ISSUES CANNOT BE RECTIFIED U/S. 154 OF THE ACT. ACCORDINGLY HE SUBMI TTED THAT THE ORDER OF LD CIT(A) IN UPHOLDING THE RECTIFICATION PROCEEDINGS U/S 154 OF THE ACT SHOULD BE QUASHED. 7. THE LEARNED AR ALSO SUBMITTED THAT THE DECISION RENDERED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN CASE OF TATA POWER CO. LTD. (SUPRA) HAS SINCE BEEN UPHELD BY THE HON'BLE JURISDICTIONAL BOMBAY HIGH COURT IN HIS DECISION DA TED 07.07.2015 RENDERED IN THE CASE OF CIT VS TATA POWER CO. LTD. IN ITA NO.1560/M/2013. A CCORDINGLY, THE LEARNED AR SUBMITTED THAT THE ORDERS PASSED BY LEARNED CIT(A) ON MERITS HAVE TO BE UPHELD, SINCE THEY ARE IN ACCORDANCE WITH THE DECISION RENDERED BY THE HON'BL E JURISDICTIONAL BOMBAY HIGH COURT. 8. ON THE CONTRARY THE LEARNED DR PLACED STRONGLY R ELIANCE ON THE ASSESSMENT ORDER. 9. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . WE FIND MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE ISSUE SOUGHT TO BE RECTIFIED U/S. 154 OF THE ACT IS A DEBATABLE ISSUE, SINCE AN IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE A SSESSEE BY THE CO-ORDINATE BENCH OF TRIBUNAL TATA POWER CO. LTD. (SUPRA). THE VERY FACT THAT AN IDENTICAL ISSUE HAS TRAVELLED UP TO THE LEVEL OF TRIBUNAL WOULD SHOW THAT THE SAID ISSU E IS A DEBATABLE ONE. THE HON'BLE SUPREME COURT IN THE CASE OF T.S.BALRAM ITO VS. VOLKAR BROS .(SUPRA) HAS HELD THAT THE DECISION TAKEN ON A DEBATABLE POINT OF LAW SHALL NOT CONSTITUTE A MISTAKE APPARENT FROM RECORD. ACCORDINGLY WE ARE OF THE VIEW THAT THE IMPUGNED RECTIFICATION ORDERS ARE LIABLE TO BE I.T.A. NO.5388- 5396/MUM/2014 & I.T.A. 5373-5377/MUM/2014 A.Y. 1985 -86, 1986-87, 1988-89, 1989-90, 1992-93,1994-95 & 1996-97 QUASHED. ACCORDINGLY WE S ET ASIDE THE ORDER OF LD CIT(A) AND QUASH THE IMPUGNED RECTIFICATION ORDERS. 10. EVEN ON MERIT WE NOTICE THAT CLAIM OF THE ASSES SEE IS SUPPORTED BY THE DECISION OF HON'BLE BOMBAY COURT RENDERED IN THE CASE OF TATA POWER CO. LTD. (SUPRA). IT IS ALSO PERTINENT TO NOTE THAT THE DECISION RENDERED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF TATA POWER CO. LTD (SUPRA) WAS AVAILABLE ON THE DATE OF PASSING OF IMPUGNED RECTIFICATION ORDERS. ACCORDINGLY, WE ARE OF THE VIEW THAT THE ASSESSEE W INS ON MERITS ALSO AND ACCORDINGLY WE DO NOT FIND ANY MERIT IN THE APPEALS FILED BY THE REVE NUE. 6.2. WE FURTHER FIND THAT IN CASE OF TATA POWER COMPANY. LTD.(ITA NO.1560 OF 2013) THE HON'BLE JURISDICTIONAL HIGH COURT HAS DEALT WITH TH E SIMILAR ISSUE .THE QUESTION BEFORE THE COURT WAS AS UNDER :- A. WHETHER THE TRIBUNAL ERRED IN LAW IN HOLDING TH AT INTEREST PORTION OF REFUND ARISING OUT OF ORDER GIVING EFFECT TO THE APPELLATE AUTHORITY HAS TO BE IGNORED FOR THE PURPOSES OF CALCULATING INTEREST U/S. 244A TO THE ASSESSEE . 6.3. THE HONBLE COURT DECIDED THE ISSUE AS UNDER :- '5. BEING AGGRIEVED, THE RESPONDENT ASSESSEE CARRIE D THE ISSUE IN APPEAL. BOTH THE COMMISSIONER OF INCOME TAX (APPEALS) (THE 'CIT(A)') AND THE TRIBUNAL HAVE ON EXAMINATION OF FACTS CORRECTLY HELD THAT WHEN A REFUND OF TAX H AS TO BE REDUCED BY REFUND ALREADY GRANTED IT IS ONLY THE TAX ELEMENT WHICH HAS TO BE ADJUSTED AND NOT THE INTEREST ELEMENT PAID ON THE DELAYED REFUND OF THE TAX. THIS IS SO AS THE INTERE ST WHICH IS PAID TO THE ASSESSEE IS FOR THE WRONGFUL WITHHOLDING OF THE ASSESSEE'S REFUND BY TH E REVENUE. IT HAS NO ELEMENT OF TAX WHICH WOULD JUSTIFY REDUCING THE SAME FROM THE REFUND BY THE REVENUE. IT HAS NO ELEMENT OF TAX WHICH WOULD JUSTIFY REDUCING THE SAME FROM THE REFU ND DUE WHILE COMPUTING THE INTEREST PAYABLE ON THE DELAYED PAYMENT OF REFUND.' 6442/M/14&6755/M/14(85-86) TATA STEEL LTD. 8 7. IT IS FURTHER RELEVANT TO NOTE IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 1990-91, THE TRIBUNAL, WHILE DECIDING THE ISSUE IN ITA NO.4962/M UM./2013 DATED 22ND OCTOBER 2014, FOLLOWED ITS ORDER PASSED IN CASE OF TATA POWER CO. LTD., WHICH WAS SUBSEQUENTLY UPHELD BY THE HON'BLE JURISDICTIONAL HIGH COURT AND DIRECTED THE ASSESSING OFFICER TO RE-CALCULATE THE INTEREST IN ACCORDANCE WITH THE DIRECTION OF THE TR IBUNAL IN CASE OF TATA POWER CO. LTD. (SUPRA). THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF T HE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE'S OWN CASE AS WELL AS THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN TATA POWER CO. LTD. (SUPRA), WE DIRECT THE ASSESSING OFF ICER TO RE-CALCULATE INTEREST OF REFUND UNDER SECTION 244A, AFTER REDUCING THE TAX ELEMENT ONLY. AS FAR AS THE DECISION OF THE HON'BLE SUPREME COURT IN SANDVIK ASIA LTD. (SUPRA), IN OUR CONSIDERED OPINION, IT HAS NO RELEVANCE TO THE PRESENT CASE AS THE INTEREST CLAIMED BY THE ASS ESSEE IS A STATUTORY INTEREST. THEREFORE, GROUNDS NO.1 AND 2 RAISED ARE ALLOWED. FROM THE ABOVE IT IS CLEAR THAT INTEREST U/S. 244A COULD NOT BE WITHDRAWN IN ABSENCE OF CLEAR CUT PROVISION IN THE SECTION FOR THE YEAR UNDER CON SIDERATION.IT IS ALSO A FACT THAT THE PROCEEDINGS TO WITHDRAW THE INTEREST WERE INITIATED U/S. 244(1A) WHEREAS VIDE RECTIFICATION ORDER DATED 28/03/2014 THE ASSESSING OFFICER HAD WI THDRAWN THE INTEREST INVOKING PROVISION OF SECTION 244(3) OF THE ACT. THUS IN OUR OPINION T HE APPEAL OF THE ASSESSEE HAS TO BE ALLOWED ON JURISDICTIONAL ISSUE AS WELL AS ON MERITS. EFFEC TIVE GROUND OF APPEAL RAISED BY THE ASSESSEE IS DECIDED IN ITS FAVOUR. ITA.6442/MUM/2014: 7. IN ITS APPEAL,THE AO HAD RAISED ONLY ONE ISSUE.HE H AD ARGUED THAT THE FAA WAS NOT JUSTIFIED IN HOLDING THAT THE INTEREST PORTION OF THE REFUND ARISING OUT OF THE ORDER GIVING EFFECT OF THE APPELLATE AUTHORITY HAD TO BE IGNORED FOR THE PURPO SE OF CALCULATING INTEREST U/S. 244A,OF THE ACT TO BE PAID TO THE ASSESSEE.WE HAVE ALREADY HELD THAT RECTIFICATION PROCEEDINGS AND RESULTANT WITHDRAWAL OF INTEREST BY THE ASSESSING O FFICER WAS NOT AS PER THE PROVISIONS OF THE ACT, WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE , HENCE, WE DISMISS THE GROUND RAISED BY THE AO. AS A RESULT,APPEAL FILED BY THE ASSESSEE IS ALLOWED AND APPEAL OF THE ASSESSING OFFICER STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JULY, 2017. 2017 SD/- SD/- ( / RAM LAL NEGI ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 26.07 .2017. 6442/M/14&6755/M/14(85-86) TATA STEEL LTD. 9 JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR F BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.