RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORP. LTD., Jaipur V. ASSISTANT COMMISSIONER OF INCOME TAX, Jaipur

ITA 905/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2112 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 30-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRITHVI RAJ MEENA
• Section: 244A; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA -@ ITA. NO. 905/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2005-06 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., UDHYOG BHAWAN, TILAK MARG, JAIPUR CUKE VS. ACIT CIRCLE -06 JAIPUR LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AABCR4695J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI PRITHVIRAJ MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 31/01/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 05/02/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 17.10.2017 FOR ASSESSMENT YEAR 2005-06 WHEREIN THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN UPHOLDING THE ACTION OF THE AO IN NOT ALLOWING INTEREST OF RS. 11,36,857/- U/S 244A FOR THE MONTH OF JUNE, 2010 EVEN WHEN THE APPROVAL FOR REFUND WAS ISSUED ON 04.06.2010. ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ORDER U/S 143(3)/250/254 WAS PASSED BY THE ASSESSING OFFICER ON 12.04.2010 AND REFUND AMOUNTING TO RS. 25,69,83,890/- WAS DETERMINED AND THE SAME WAS ISSUED TO THE ASSESSEE VIDE REFUND VOUCHER DATED 09.06.2010. THE ASSESSEE MOVED AN APPLICATION U/S 154 BEFORE THE AO REQUESTING THAT THE INTEREST U/S 244A HAS BEEN ALLOWED UP TO MAY, 2010 INSTEAD OF JUNE, 2010. THE CONTENTION SO ADVANCED BY THE ASSESSEE IN ITS RECTIFICATION APPLICATION WAS REJECTED BY THE ASSESSING OFFICER STATING THAT THE INTEREST U/S 244A IS ALLOWABLE TO THE ASSESSEE UPTO MAY, 2010 AS PER APPROVAL NO. 498 DATED 04.06.2010 AND THE SAME HAS BEEN DULY ALLOWED TO THE ASSESSEE. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED THAT INTEREST U/S 244A IS TO BE ALLOWED UP TO THE DATE ON WHICH REFUND IS GRANTED. AS PER RULE 119A (B) WHERE INTEREST IS TO BE CALCULATED FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN A PERIOD, ANY FRACTION OF A MONTH SHALL BE DEEMED TO BE FULL MONTH AND INTEREST SHALL BE SO CALCULATED. IN THE PRESENT CASE, THE INTEREST IS TO BE CALCULATED @1/2% FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM 1 ST APRIL OF ASSESSMENT YEAR TO THE DATE ON WHICH THE REFUND IS GRANTED. IT IS UNDISPUTED THAT REFUND IS GRANTED ON 09.06.2010. THE ASSESSEE IS, THEREFORE, ENTITLED TO INTEREST FOR THE MONTH OF JUNE 2010 ALSO. 4. IT WAS SUBMITTED THAT THE AO HAS NOT ACCEPTED THE CONTENTION OF THE ASSESSEE FOR THE REASON THAT CIT HAS GIVEN THE APPROVAL TO ALLOW INTEREST TO THE ASSESSEE UP TO MAY 2010. IT IS SUBMITTED THAT ANY ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 3 APPROVAL BY THE AUTHORITIES CANT OVERRIDE THE PROVISIONS OF LAW. WHEN LAW IS SPECIFIC, THE COURSE OF THE LAW HAS TO BE FOLLOWED AND IT CANT BE CIRCUMVENTED BY THE APPROVAL OF THE ADMINISTRATIVE AUTHORITIES. HENCE THE AO BE DIRECTED TO ALLOW THE INTEREST FOR THE MONTH OF JUNE 2010 WHICH WORKS OUT TO RS. 11,36,857/- (22,73,71,360*0.5%). 5. THE LD. CIT(A) REFERRING TO THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF RAJASTHAN STATE ELECTRICITY BOARD VS. CIT & ORS. (2006) 281 ITR 274 (RAJ) HELD THAT INTEREST ON REFUND HAS BEEN RIGHTLY ALLOWED TO THE ASSESSEE. AGAINST THE SAID ORDER OF THE LD CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 6. DURING THE COURSE OF HEARING, LD. AR TOOK US THROUGH THE PROVISIONS OF SECTION 244A AND RULE 119A AND SUBMITTED THAT INTEREST ON REFUND HAS TO BE CALCULATED @ % FOR EVERY MONTH OR PART OF THE MONTH AND ANY FRACTION OF THE MONTH SHALL BE DEEMED TO BE FULL MONTH AND INTEREST SHALL BE SO CALCULATED. IT WAS SUBMITTED THAT IT IS AN UNDISPUTED FACT THAT REFUND IS GRANTED ON 09.06.2010 AS EVIDENT FROM THE INCOME TAX REFUND VOUCHER/ORDER DATED 09.06.2010 WHICH IS AVAILABLE AT THE ASSESSEES PAPER BOOK PAGE NO. 3. FURTHER OUR REFERENCE WAS DRAWN TO THE CBDT CIRCULAR NO. 20D (XXII-22) OF 1968, DATED 20.08.1968 WHICH READS AS UNDER:- UNDER THE TERMS OF S. 243, INTEREST IS PAYABLE BY THE GOVERNMENT WHERE THE REFUND IS NOT GRANTED WITHIN THREE MONTHS FROM THE DATE ON WHICH THE TOTAL INCOME IS DETERMINED, AND THE INTEREST WHERE PAYABLE IS TO BE CALCULATED AT THE SPECIFIED RATE, FROM THE DATE IMMEDIATELY FOLLOWING THE EXPIRY OF THE THREE MONTHS AFORESAID TO THE DATE OF THE ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 4 ORDER GRANTING THE REFUND. FROM THIS IT IS CLEAR THAT THE DATE OF THE ORDER GRANTING THE REFUND IS THE DATE OF THE REFUND VOUCHER ITSELF. THE VIEW STATED TO HAVE BEEN TAKEN BY SOME ITOS, THAT THE DATE OF THE ASSESSMENT ORDER IS TO BE TAKEN AS THE DATE OF THE ORDER GRANTING THE REFUND IS NOT CORRECT. THUS, IN CASES WHERE INTEREST IS PAYABLE BY THE CENTRAL GOVERNMENT TO ASSESSEES UNDER S. 243 OF THE ACT, SUCH INTEREST IS TO BE CALCULATED UP TO THE DATE OF ISSUE OF THE REFUND VOUCHER. 7. FURTHER THE ASSESSEE REFERRED TO THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF RAJASTHAN STATE ELECTRICITY BOARD (SUPRA) AND SUBSEQUENT DECISION OF LUCKNOW BENCH OF THE TRIBUNAL IN CASE OF INDO GULF CORPORATION LTD. VS. DCIT REPORTED IN 141 TTJ 0862 WHEREIN THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF RAJASTHAN STATE ELECTRICITY BOARD (SUPRA) HAS BEEN FOLLOWED. IT WAS SUBMITTED THAT THE SAID DECISION OF THE HONBLE RAJASTHAN HIGH COURT, IN FACT, SUPPORTS THE CASE OF THE ASSESSEE. THE LD. AR ALSO REFERRED TO THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN CASE OF JAY BROS. INVESTMENT & TRADING CO. (P) LTD. VS. DCIT REPORTED IN (2002) 74 TTJ 748 WHEREIN A SIMILAR PROPOSITION HAS BEEN LAID DOWN WHEREBY REFUND HAS BEEN DIRECTED TO BE CALCULATED FROM THE FIRST DAY OF THE APRIL OF THE ASSESSMENT YEAR TO THE DATE ON WHICH REFUND VOUCHER IS SIGNED. 8. THE LD. DR SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. FURTHER HE REFERRED TO THE DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. ARVIND MILLS LTD., IN ITA NO. 2486 OF 2009 DATED 13.09.2011 FOR THE LEGAL PROPOSITION THAT THE ASSESSEE WAS NOT ENTITLED TO INTEREST UNDER SECTION 244A OF THE ACT FOR BOTH THE MONTHS WHEN THE TAX WAS PAID AND ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 5 WHEN THE TAX REFUNDABLE WAS SUBSEQUENTLY DETERMINED. PER CONTRA, THE LD. AR HAS SUBMITTED THAT IN THE INSTANT CASE, THE INTEREST IS CALCULATED FROM THE MONTH NEXT FOLLOWING THE MONTH IN WHICH TAX IS PAID BUT INTEREST IN THE MONTH IN WHICH REFUND ORDER IS ISSUED I.E. 4 TH JUNE, 2010 IS NOT GRANTED AND A WORKING OF INTEREST SO GRANTED WAS SUBMITTED. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. 10. IN CASE OF RAJASTHAN STATE ELECTRICITY BOARD (SUPRA), THE FOLLOWING QUESTIONS OF LAW WERE RAISED BY THE APPELLANT IN THEIR APPEAL BEFORE THE HONBLE RAJASTHAN HIGH COURT : '(I) WHETHER THE EXPRESSION 'THE DATE ON WHICH THE REFUND IS GRANTED' IN CLAUSE (A) OF SUB-SECTION (1) OF SECTION 244A, AS WAS APPLICABLE IN THE RELEVANT ASSESSMENT YEAR, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, NEED TO BE CONSTRUED TO BE THE DATE OF SERVICE OF THE REFUND ORDER AND THE TRIBUNAL ACTED CONTRARY TO LAW IN MODIFYING THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ? (II) WHETHER THE BELATED DESPATCH OF REFUND ORDER IS AGAINST THE LEGISLATIVE INTENDMENT AS CONTEMPLATED UNDER SECTION 244A OF THE INCOME-TAX ACT, 1961, AND ENTITLES THE ASSESSEE FOR INTEREST ON THE REFUND AMOUNT UNDER SECTION 244A AND ALSO ON EQUITABLE CONSIDER ACTION TILL THE DATE OF SERVICE OF REFUND ORDER ?' ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 6 11. THE HONBLE RAJASTHAN HIGH COURT WHILE DISMISSING THE APPEAL HELD AS UNDER: THE LIMITED CONTROVERSY IN THIS APPEAL IS WHETHER THE INTEREST SHOULD BE GRANTED TILL THE DATE OF THE DESPATCH OF THE REFUND ORDER OR THE DATE WHEN THE ORDER REGARDING PAYMENT OF INTEREST HAS BEEN SIGNED. THE RELEVANT PROVISION IS CLAUSE (A) OF SUB-SECTION (1) OF SECTION 244A OF THE INCOME-TAX ACT. FOR READY REFERENCE, THAT READS AS UNDER : 'WHERE THE REFUND IS OUT OF ANY TAX COLLECTED AT SOURCE UNDER SECTION 206C OR PAID BY WAY OF ADVANCE TAX OR TREATED AS PAID UNDER SECTION 199, DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR, SUCH INTEREST SHALL BE CALCULATED AT THE RATE OF TWO-THIRD PER CENT, FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE 1ST DAY OF APRIL OF THE ASSESSMENT YEAR TO THE DATE ON WHICH THE REFUND IS GRANTED.' IN CLAUSE (A) THE WORDS HAVE BEEN USED 'REFUND IS GRANTED'. REFUND IS GRANTED THE MOMENT THE CONCERNED OFFICER HAS SIGNED THE ORDER REGARDING PAYMENT OF THE INTEREST UNDER SECTION 244A OF THE INCOME-TAX ACT. WE SEE NO ERROR IN THE ORDER OF THE TRIBUNAL. THE APPEAL STANDS DISMISSED AT ADMISSION STAGE. 12. IN CASE OF ARVIND MILLS LTD (SUPRA), THE QUESTION FOR CONSIDERATION FRAMED FOR CONSIDERATION BY THE HONBLE GUJARAT HIGH COURT WAS AS UNDER: WHETHER IN FACTS AND IN CIRCUMSTANCES OF THE CASE THE APPELLATE TRIBUNAL WAS RIGHT IN LAW IN REVERSING THE ORDERS PASSED BY THE CIT (APPEALS) AND THEREBY HOLDING THAT THE ASSESSEE WAS ENTITLED TO INTEREST ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 7 UNDER SECTION 244A OF THE ACT FOR BOTH THE MONTHS WHEN THE TAX WAS PAID AND WHEN THE TAX REFUNDABLE WAS ADJUSTED IRRESPECTIVE OF THE PERIOD BETWEEN SUCH EVENTS? 13. THE HONBLE GUJARAT HIGH COURT REFERRING TO THE PROVISIONS OF SECTION 244A, RULE 119A AS WELL AS SECTION 3(35) OF THE GENERAL CLAUSES ACT HELD AS UNDER:- 26.0 FROM THE ABOVE STATUTORY PROVISIONS, IT CAN BE SEEN THAT SECTION 244A PROVIDES FOR PAYMENT OF INTEREST WHERE REFUND OF ANY AMOUNT BECOMES DUE TO THE ASSESSEE UNDER THE SAID ACT. IN SUCH A CASE THE ASSESSEE IS ENTITLED TO RECEIVE IN ADDITION TO THE REFUND AMOUNT, SIMPLE INTEREST AT THE PRESCRIBED RATE. CLAUSE (B) OF SECTION (1) OF SECTION 244A OF THE ACT IN PARTICULAR PROVIDES THAT SUCH INTEREST SHALL BE CALCULATED AT THE RATE OF ONE-HALF PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD OF 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. IN THE OTHER WORDS, INTEREST AT THE PRESCRIBED RATE IS TO BE PAID TO THE ASSESSEE ON THE REFUND OF TAX PAID FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE DATE OF PAYMENT OF THE TAX TO THE DATE ON WHICH REFUND IS GRANTED. 27.0 RULE 119(A) OF THE SAID RULES FURTHER CLARIFIES THAT IN CALCULATING THE INTEREST PAYABLE BY THE GOVERNMENT TO THE ASSESSEE UNDER ANY PROVISION OF THE ACT WHERE INTEREST IS TO BE CALCULATED FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN A ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 8 PERIOD, EVERY FRACTION OF MONTH SHALL BE DEEMED TO BE FULL MONTH AND THE INTEREST SO CALCULATED. 28.0 BY READING OF SECTION (1) OF SECTION 244A OF THE ACT WITH RULE 119(A) OF THE SAID RULES WOULD BRING ABOUT SITUATION WHEN AN ASSESSEE WHO HAS PAID THE TAX AND SUCH TAX IS TO BE REFUNDED, THE ASSESSEE IS TO BE PAID INTEREST AT THE PRESCRIBED RATE FOR EVERY MONTH OR PART OF A MONTH COMPRISING THE PERIOD FROM THE DATE OF PAYMENT OF THE TAX TO THE DATE ON WHICH THE REFUND IS GRANTED. IF SUCH PERIOD IS A FRACTION OF A MONTH, THE SAME SHALL BE DEEMED TO BE A FULL MONTH AND THE INTEREST SHALL BE CALCULATED FOR THE ENTIRE MONTH ACCORDINGLY. IN OTHER WORDS WHILE CALCULATING THE PERIOD FOR GRANT OF INTEREST, IF THERE IS ANY FRACTION OF A MONTH, SUCH FRACTION SHALL BE IGNORED AND INSTEAD, THE ASSESSEE SHALL BE PAID INTEREST FOR THE FULL MONTH. 29.0 SO MUCH IS CLEARLY EMERGING FROM THE PLAIN LANGUAGE USED IN THE STATUTORY PROVISIONS NOTICED BY US. THE CASE OF THE ASSESSEE HOWEVER IS THAT THE WORD MONTH SHOULD BE CONSIDERED AS PER BRITISH CALENDER AS DEFINED IN SECTION 3(35) OF THE GENERAL CLAUSES ACT AND ACCORDINGLY IF THERE IS A FRACTION OF A MONTH ON EITHER SIDE OF THE EVENTS I.E. PAYMENT OF TAX OR REFUND THEREOF, BOTH FRACTIONS SHOULD BE CONSIDERED AS FULL MONTHS AND FOR BOTH MONTHS THE ASSESSEE MUST BE HELD ENTITLED TO RECEIVE INTEREST. 37.0 TO OUR MIND THE WORDS APPEARING IN SUB-SECTION (1) OF SECTION 244A COMPRISED IN A PERIOD ARE SIGNIFICANT. IN CLAUSE (B) ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 9 OF SECTION 244A (1) IT IS PROVIDED THAT THE INTEREST SHALL BE CALCULATED AT THE PRESCRIBED RATE FOR EVERY MONTH OR OF PART A MONTH COMPRISED IN THE PERIOD FROM THE DATE THE TAX IS PAID TO THE DATE ON WHICH REFUND IS GRANTED. SIMILARLY, IN RULE 119(A) OF THE RULES, IN CLAUSE-B THEREOF, IT IS PROVIDED THAT EVERY MONTH OR PART OF A MONTH COMPRISED IN A PERIOD, FRACTION OF A MONTH SHALL BE DEEMED TO BE A FULL MONTH. THEREFORE, IN ORDER TO ASCERTAIN FOR HOW MANY MONTHS THE ASSESSEE WOULD BE ENTITLED TO RECEIVE INTEREST, THE NUMBER OF MONTHS COMPRISED IN THE PERIOD SHALL HAVE TO BE FOUND OUT. IN THIS CONTEXT, THE TERM MONTH IN OUR OPINION, MUST BE GIVEN THE ORDINARY SENSE OF THE TERM I.E. 30 DAYS OF PERIOD AND NOT THE BRITISH CALENDAR MONTH AS DEFINED UNDER SECTION 3(35) OF THE GENERAL CLAUSES ACT. 38.0 WE ARE OF THE OPINION THAT THE DEFINITION CONTAINED IN SECTION 3(35) OF THE GENERAL CLAUSES ACT DEFINING THE TERM MONTH CANNOT BE ADOPTED FOR THE PURPOSE OF SUB-SECTION (1) OF SECTION 244A OF THE ACT. SUCH IMPORTATION OF THE DEFINITION WOULD LEAD TO ANOMALOUS SITUATION. FOR EXAMPLE, THE ASSESSEE WHO PAYS TAX ON 1 ST JANUARY OF A PARTICULAR YEAR AND IS GRANTED REFUND ON 28 TH OF FEBRUARY OF THE SAME YEAR, WOULD BE ENTITLED TO RECEIVE INTEREST FOR TWO MONTHS. IF THE CONTENTION OF THE ASSESSEE IN THE PRESENT CASE IS ACCEPTED, IN A CASE WHERE THE ASSESSEE PAYS TAX ON 31 ST JANUARY AND IS GRANTED REFUND ON 1 ST FEBRUARY OF THE SAME YEAR, SHALL ALSO BE ENTITLED TO INTEREST FOR TWO FULL MONTHS. THIS WOULD BE SO BECAUSE THE ASSESSEE CONTENDS THAT FOR THE PURPOSE OF SUB-SECTION (1) OF SECTION 244A THE TERM MONTH SHOULD BE ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 10 UNDERSTOOD AS BRITISH CALENDER MONTH AND SINCE RULE 119(A) OF THE RULES PROVIDES FOR IGNORING A FRACTION OF MONTH AND GRANTING INTEREST FOR THE FULL MONTH INSTEAD, THE ASSESSEE IN THE SECOND EXAMPLE GIVEN ABOVE SHOULD RECEIVE INTEREST FOR MONTH OF JANUARY AS WELL AS FOR THE MONTH OF FEBRUARY. TO OUR MIND SUCH INTERPRETATION WOULD ONLY LEAD TO ANOMALOUS SITUATION AND SHOULD THEREFORE BE AVOIDED. 39.0 AS ALREADY NOTED EARLIER, VARIOUS DECISIONS CITED BEFORE US ADOPTING THE DEFINITION OF TERM MONTH CONTAINED IN SECTION 3(35) OF THE ACT WERE RENDERED IN THE BACKGROUND OF PENAL PROVISIONS CONTAINED IN SECTION 271(1)(A) OF THE ACT. THE SAID PROVISION PRESCRIBES PENALTY FOR NON-FILING OR LATE FILING OF RETURNS AND THE PENALTY IS TO BE CALCULATED ON EVERY MONTH OF SUCH DEFAULT. UNDER THIS BACKGROUND VARIOUS COURTS WERE OF THE OPINION THAT THE TERM MONTH MUST BE UNDERSTOOD AS DEFINED UNDER SECTION 3(35) OF THE GENERAL CLAUSES ACT. THE COURTS WERE OF THE OPINION THAT THERE IS NOTHING REPUGNANT IN SECTION 271(1)(A) OF THE ACT SO AS TO REJECT THE APPLICABILITY THEREOF. IN THE PRESENT CASE, HOWEVER, WE FIND THAT THERE ARE INBUILT INDICATIONS WHY THE TERM MONTH MUST NOT BE UNDERSTOOD AS BRITISH CALENDAR MONTH. ANY OTHER INTERPRETATION AS ALREADY OBSERVED WOULD LEAD TO ANOMALOUS SITUATION. ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 11 14. IN LIGHT OF SECTION 244A, RULE 119A AND THE LEGAL PROPOSITION SO LAID DOWN BY THE HONBLE RAJASTHAN HIGH COURT IN CASE OF RAJASTHAN STATE ELECTRICITY BOARD (SUPRA), AND HONBLE GUJARAT HIGH COURT IN CASE OF ARVIND MILLS (SUPRA), IN THE INSTANT CASE, WHERE THE ASSESSEE HAS PAID THE TAXES AND SUCH TAXES HAVE BEEN REFUNDED, THE ASSESSEE IS TO BE PAID INTEREST AT THE PRESCRIBED RATE FOR EVERY MONTH OR PART OF A MONTH COMPRISING THE PERIOD FROM THE DATE OF PAYMENT OF THE TAX TO THE DATE ON WHICH THE REFUND IS GRANTED. IF SUCH PERIOD IS A FRACTION OF A MONTH, THE SAME SHALL BE DEEMED TO BE A FULL MONTH AND THE INTEREST SHALL BE CALCULATED FOR THE ENTIRE MONTH ACCORDINGLY. THEREFORE, IN ORDER TO ASCERTAIN FOR HOW MANY MONTHS THE ASSESSEE WOULD BE ENTITLED TO RECEIVE INTEREST, THE NUMBER OF MONTHS COMPRISED IN THE PERIOD SHALL HAVE TO BE DETERMINED AND THE TERM MONTH HAS TO BE GIVEN THE ORDINARY SENSE OF THE TERM I.E. 30 DAYS OF PERIOD AND NOT THE BRITISH CALENDAR MONTH AS DEFINED UNDER SECTION 3(35) OF THE GENERAL CLAUSES ACT. THE DATE OF PAYMENT OF TAX DEMAND HAS BEEN STATED BY THE LD AR AS 29.02.2008, 4.02.2008 AND 3.02.2009. THE DATE ON WHICH THE REFUND IS GRANTED IS THE DATE OF THE REFUND VOUCHER/ORDER WHICH IS SIGNED AND ISSUED ON 9.6.2010. THE AO SHALL VERIFY THE DATE OF PAYMENT OF TAXES AND TAKING THE DATE OF GRANT OF REFUND AS 9.6.2010, DETERMINE THE NUMBER OF MONTHS FOR WHICH THE INTEREST IS PAYABLE AT THE PRESCRIBED RATE OF INTEREST IN LIGHT OF ABOVE DISCUSSIONS AND THE INTEREST SO DETERMINED IS DIRECTED TO BE PAID TO THE ASSESSEE. THE MATTER IS ACCORDINGLY SET-ASIDE TO THE FILE OF THE AO WITH THE SAID DIRECTIONS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISPOSED OFF WITH ABOVE DIRECTIONS. ITA NO. 905 /JP/2017 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INDUSTRIAL CORPORATION LTD VS. ACIT CIRCLE -6. 12 ORDER PRONOUNCED IN THE OPEN COURT ON 05/02/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 05/02/2018. * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S RAJASTHAN STATE INDUSTRIAL DEEVELOPMENT & INVESTMENT CORPORATION LTD, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-06, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 905/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR