Indian Oil Corporation Ltd. Vs DCIT (ITAT Mumbai)
Conclusion: Assessee was entitled to interest on refund arising out of excess self-assessment tax from the date of payment of self-assessment tax till the date of grant of refund
Held: AO finalized assessment with a demand of Rs. 619,42,03,502/- after consideration of the refund already issued to the assessee at the time of processing. Assessee made a part payment of Rs. 61,18,00,000/- against the demand and also filed an appeal against the assessment order before CIT(A). CIT(A) gave partial relief to the assessee. After giving effect to order of CIT(A), a refund of Rs. 18,61,65,829/- was issued to assessee. As the AO had not allowed certain credits of advance tax, TDS and also interest on excess payment of self-assessment tax, assessee filed an appeal before CIT(A) who issued necessary directions to the AO. The appeal effect to this order of CIT(A) was given only after a gap of 5 years. However, the interest on excess payment of self-assessment was again denied. Revenue being aggrieved with the order of CIT(A) on merits had filed an appeal before ITAT and a cross appeal was also filed by assessee against the order of CIT(A). During these pendency of both these appeals, assessee availed the ‘Vivad se Vishwas Scheme’ in 2020. PCIT, Mumbai-6 accepted the assessee’s application and issued form No. 3 wherein a demand of Rs. 112,49,12,651/- was notified for settlement of both the appeals. Assessee made the payment of demanded tax on 30.09.2021 and form No. 5 was issued on 02.03.2022. Meanwhile, the appeal regarding non-grant of interest on self-assessment tax while giving effect to CIT(A)’s order was wrongly dismissed by CIT(A) under a misconception that the dispute had been resolved after availing of “Vivad se Vishwas Scheme” by the assessee. Assessee filed an appeal before the ITAT against this dismissal. The matter was remanded back to the file of CIT(A) by the order of the co-ordinate bench for denovo adjudication of the issue. It was held that assessee’s claim for interest on self-assessment tax was clearly covered under the provisions of clause (b) of section 244A(1). Even though the self-assessment tax was not specifically mentioned therein, it had been held by various High Courts as well as co-ordinate benches of ITAT that assessee was entitled to interest on refund arising out of excess amount paid as self-assessment tax. The insertion of subsection (aa) in section 244A(1) was made by the Finance Act, 2016 to clarify the intent of revenue to grant interest on self-assessment tax. The issue was also covered by the decision of the Hon’ble Jurisdictional High Court in the case of Stock Holding Corporation of India Ltd. The contention of the revenue was that the decision was rendered prior to insertion of clause (aa) which was brought in with prospective effect was not acceptable. There had been numerous decisions, both before and after the insertion of clause (aa) on this issue, granting the assessee’s claim for interest u/s 244A on excess self-assessment tax. Moreover, in assessee’s own case in earlier years, such interest had been granted by CIT(A)/AO. Accordingly, assessee was entitled to interest on refund arising out of excess self-assessment tax from the date of payment of self-assessment tax till the date of grant of refund.
