ACIT Vs Aarti International Ltd. (ITAT Chandigarh)
ITAT Chandigarh held that interest on refund resulting due to additional claim is payable from the date the additional ground, resulting into refund, has been put up for the first time. Here, TUFS receipt to be treated as capital receipt was for the first time taken up before CIT(A) on 04/01/2016.
Facts-
The assessee filed its return of income declaring total income of Rs. 83,79,59,930/-. The assessment was completed by the Assessing officer u/s. 143(3) vide order dt. 28/02/2014 wherein the assessed income was determined at Rs. 84,01,25,935/- after making certain additions and disallowances. On appeal, CIT(A) deleted the additions/disallowances made by the AO.
Notably, the claim of TUFS subsidy being exempt from tax has been raised for the first time during the appellate proceedings and such a claim was neither made while filing the return of income nor anytime during the course of assessment proceedings.
CIT(A) admitted the additional ground of appeal taken by the assessee to treat TUFS subsidy as capital receipt.
The limited issue under consideration relates to whether the proceedings resulting in a refund are delayed for reasons attributable to the assessee and the period of such delay which shall be excluded from the period for which the assessee is eligible for interest u/s 244A on refund of aforesaid taxes in respect of TUFS Subsidy.
Conclusion-
We therefore find that there are decisions rendered by different Hon’ble High Courts touching upon an identical controversy regarding additional claim made for the first time before the ld CIT(A) or the Tribunal; or a belated claim made before the AO during the course of assessment proceedings which on appeal before the ld CIT(A) or before the Tribunal have been allowed in favour of the assessee resulting in refund of taxes and consequent interest.
It goes without saying that the decision of Hon’ble High Court is binding on the Tribunal and other authorities under its superintendence throughout the territories in relation to which it exercises its jurisdiction. Where divergent views are rendered by different High Courts, an inferior authority under one of such High Courts, is bound to follow its jurisdictional High Court notwithstanding that other view of the non-jurisdictional High Court may sound more appealing on an individual level vis-a-vis the view of the jurisdictional High Court.
Held that the assessee took an additional ground of appeal for the first time before the Ld. CIT(A) vide its letter dated 04.10.2016 stating that TUFS subsidy of Rs. 10,39,49,181/- which has been received by the assessee from the Ministry of Textiles is exempt from tax and should be reduced from the assessed income. The Ld. CIT(A) vide order dt. 28/01/2019 admitted the additional ground of appeal and held that the TUFS subsidy received by the assessee company from the Ministry of Textiles, Government of India be treated as capital receipt and directed the AO to reduce the amount of TUFS subsidy received during the year from total assessed income. Therefore, the assessee shall be eligible for interest on the refund amount with effect from 04/10/2016 (and not from 01/04/2011) till the date of grant of refund.
