Interest U/s. 244A on refund of excess SA tax payable from self-assessment tax payment date

FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-

These cross appeals are arising out of the order of Commissioner (Appeals)-4, Mumbai, in appeal No. CIT(A)-4/IT-140/DCIT-2(1)/2013-14 dated 14-5-2013. The rectification order passed by DCIT Circle-2(1), Mumbai for the assessment year 2004-05 vide order dated 28-07-2014 under section 154 of the Income Tax Act, 1961 (hereinafter ‘the Act’).

2. The only issue in these cross appeals is against the order of Commissioner (Appeals) in directing the assessing officer to grant interest under section 244A(1)(b) of the Act on self assessment tax paid from the date of assessment order and not from the date of payment of self assessment tax. For this Revenue has raised following two grounds:–

“1. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in interpreting the provision of Section 244A(1)(b) of Income Tax Act.

2. On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in directing the assessing officer to grant interest under section 244A(1)(b) on excess SA tax paid without appreciating the fact that in view of Explanation to Section 244A(1)(b), the interest is payable only on the amount of tax paid in excess of tax/penalty specified in notice of demand issued under section 156 of the Income Tax Act.”

For this assessee has raised following three grounds: –

“1. The learned Commissioner (CIT(A)) ought to have directed that the assessee is entitled to interest under section 244A(1)(b) from the date of payment of Self-Assessment Tax (28-4-2004) to the date on which refund of excess Self-Assessment Tax was granted (22-2-2012).

2. The learned Commissioner (CIT(A)) erred in holding that the assessee was entitled to interest on refund of excess Self-Assessment tax from the date of the assessment order and not from the date of payment of Self-Assessment Tax.

3. The learned Commissioner (CIT(A)) ought to have directed that assessee was entitled to interest under section 244A(1)(b) on the following amounts for the following period: