ITAT DELHI BENCH `E’, NEW DELHI
Power Finance Corpn. Ltd. V ACIT, Appeal No: ITA Nos. 4592 and 4593/Del/2004, Dated: 15.12.2008
RELEVANT EXTRACTS:
11. Section 244A has been inserted on the statute by the Direct Tax Laws (Amendment) Act, 1989 we f. 1st day of April 1989 and it has been inserted in lieu of Section 214 243 and 244. Sub-section (1) of Section 244A provides for granting of refund by the Revenue to the assessee in the cases where payment of advance tax and TDS exceeds the tax liability In the present case, there is no dispute so as for the entitlement of assessee to get refund, but the controversy is regarding the period which is to be excluded as per provisions of Section 244A (2). Looking to the language used in Section 244A, it is very clear the: the AO, considering the facts before him, will have to determine whether the assessee is entitled to refund or not and if he is entitled to refund then for what period he is entitled to interest and further where any question arises as to the period to be excluded the same shall be decided either by Chief CIT or CIT whose decision thereon shall be final. Here, in the present case the AO excluded the period at his own while processing the claim of the assessee for refund. Under the express provisions of Section 244A(2) the AO could not cc so as it was outside of his jurisdiction and the question of exclusion of any period for the purpose of grant of interest u/s 244A(1) was necessarily and mandatorily to be decided either by Chief CIT or CIT. Thus, in the facts and circumstances of the case, the AO did not work in accordance with the provisions of law which in itself is a mistake apparent from record. What was required to be done by the AO was to refer the matter either to Chief Commissioner or Commissioner for a determination of period for which the assessee was not entitled to grant of interest u/s 244A(1). Ld CIT (A) is also wrong in holding that the AO was right in excluding such period. No such authority is vested in AO to exclude period and if any question has arisen for exclusion of any period, the manner provided in sub-section (2) has to be adopted by the AO. Thus, neither the AO nor the CIT (A) were right in ordering the exclusion of any period as the exclusion, if any was outside their powers. To that extent the order of the AO and CIT (A) suffers from legal infirmity Keeping in view the entirety of facts and the relevant provisions of law, we are of the opinion that it would serve the interest of justice if the matter is restored back to the file of AO with a direction to refer the issue regaling exclusion of period as prescribed in sub-section (2) of Section 244A either to Chief CIT or CIT (as the case may be) to get it determined. We find that similar action of the Tribunal was upheld by Hon’ble Kerala High Court in the case of Kerala State Civil Supplies Corpn. Ltd. Vs JCIT 282 ITR 547 (Ker.) wherein it was found by the Tribunal that the AO without referring the matter either to chief CIT or CIT had excluded the period for grant of interest u/s 244A(1) and it was held that the order of the AO was to be set aside to enable him to proceed in accordance with the provisions of law and the AO was directed to deal with the matter afresh in terms of Section 244A(2).
