THE SOUTH INDIAN BANK LIMITED,THRISSUR V. DCIT, THRISSUR

ITA 182/COCH/2025

AI Insights

The case involves the South Indian Bank Ltd., which appealed against the order of the CIT(A) that dismissed their appeal regarding the non-grant of interest under section 244A(1A) of the Income Tax Act, 1961, on a refund due from a revised assessment for the Assessment Year 2007-08. Initially, the bank filed a return declaring an income of Rs. 2,65,00,020, which was later revised. The AO made certain disallowances, leading to a higher assessed income. The ITAT had earlier modified this assessment, and the consequential order did not include interest under section 244A(1A), which was contested by the bank. The CIT(A) held that the provisions of section 244A(1A) were not retrospective and effective only from 01/06/2016. The ITAT, referencing the CBDT's clarification and a specific case decision, found that the bank was entitled to interest under the said section, as the consequential order was passed after its enactment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714333 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2007-2008
• Other Referred Cases: Nima Specific Family Trust vs. ACIT(12 ITR-OL 566)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VENI RAJ
• Assessee Lawyers: NARESH C
• Section: 143(3); 244A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SONJOY SARMA, JM ITA No. 182/Coch/2025 Assessment Year: 2007-08 The South Indian Bank Ltd., .......... Appellant Head Office, Mission Quarters, T.B. Road, Thrissur. [PAN: AABCT 0022 F] vs. Dy Commissioner of Income Tax .......... Respondent Circle-1(1) & TPS, Thrissur. Appellant by: Shri Naresh C, CA Respondent by: Smt. Veni Raj, CIT-DR Date of Hearing: 12.06.2025 Date of Pronouncement: 06.08.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the ADDL/JCIT-1, Noida [CIT(A)] dated 15.01.2025 for Assessment Year (AY) 2007-08. 2. Brief facts of the case are that the assessee is a private scheduled bank, engaged in the business of banking. The return of income for the A.Y. 2007-08 was filed on 12/11/2007 declaring Printed from counselvise.com 2 ITA No. 182/Coch/2025 The South Indian Bank Ltd.. income of Rs. 2,65,00,020/-. Subsequently, the same was revised on 25/09/2008 declaring total income of Rs. 5,06,00,592/-. Against the said return of income, the assessment was completed by the Addl. CIT, Range-1, Trichur(for short, 'AO')vide order dated 29/09/2008 passed u/s. 143(3) of the Income Tax Act, 1961 (for short, 'the Act') at a total income of Rs. 211,21,24,830/- after making certain disallowances. On appeal before CIT(A)vide order dated 04/12/2013 granted partial relief. On further appeal to the ITAT in ITA No.181/Coch/2014 dt. 24/12/2014, the assessment order was modified at a total income of Rs. 144,91,03,583/-. While passing modification order vide order dated 06/07/2020, the AO had not granted interest u/s. 244A(1A) of the Act. 3. Being aggrieved, the appellant-bank filed an appeal before the CIT(A), who vide impugned order dismissed the appeal by holding that the provisions of section 244A(1A) are not retrospective and are effective only w.e.f. 01/06/2016. Accordingly, appeal was dismissed. 4. Being aggrieved, the appellant-bank is in appeal before this tribunal in the present appeal. 5. We have heard the rival contentions and perused the material available on record. The issue that arises for our determination is with regard to computation of amount of eligible interest on refund due to the appellant bank. The amount of refund was determined Printed from counselvise.com 3 ITA No. 182/Coch/2025 The South Indian Bank Ltd.. pursuant to the consequential order passed to the order of ITAT. While determining the amount of refund, it appears that the AO had not granted interest u/s. 244A. Section (1A) was inserted by the Parliament by Finance Act, 2016 w.e.f. 01.06.2016 governing grant of interest in such situations. Undisputedly, the consequential order to the ITAT order was passed on 06/07/2020after the provisions of section 244A(1A) came into effect w.e.f. 01/06/2016. The CBDT has clarified that the consequential order giving effect to the appellate order passed after 01/06/2016 interest u/s. 244A is allowable and also reference can be made to the decision of Nima Specific Family Trust vs. ACIT(12 ITR-OL 566). Therefore, in view of this legal position, we are of the considered opinion, the appellant is entitled for interest us/ 244A(1A) of the Act. Accordingly, the matter is restored to the file of AO to grant interest on the refund determined on the consequential order after affording a reasonable opportunity of hearing. 6. In the result, the appeal of the assessee stands partly allowed for statistical purposes. Order pronounced on 06th August, 2025 under Rule 34 of The Income Tax (Appellate Tribunal) Rules, 1963 Sd/- Sd/- (SONJOY SARMA) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 06th August, 2025 Printed from counselvise.com 4 ITA No. 182/Coch/2025 The South Indian Bank Ltd.. vr/-. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "