pri Assessee entitled to interest on refund arising on excess payment of self-assessment tax U/s. 244A Assessee entitled to interest on refund arising on excess payment of self-assessment tax U/s. 244A

Case Law Details

Case Name : CIT Vs. P.N. Writer (Bombay High Court)
Appeal Number : ITA No. 95 of 2015
Date of Judgement/Order : 25/09/2017
Related Assessment Year :

CIT Vs. P.N. Writer (Bombay High Court)

Assessee was entitled to the interest on refund arising on excess payment of self-assessment tax under section 244A, despite the revenue’s contention that assessee had failed to produce any material which would demonstrate how this tax was worked out, and particularly during the course of self-assessment, since the self-assessment tax includes any amount of tax which had already been paid under the provisions of the Income Tax Act and once that was so, the assessee was entitled to interest.

FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:-

This Appeal by the Revenue challenges the order passed by the Income Tax Appellate Tribunal dated 18-6-2014.

2. The assessment year in question is 2008-2009.

3. The Revenue has proposed four questions on page nos. 5 and 6 of the memorandum of Appeal and it is stated that each one of them is substantial question of law.

4. The argument is that the amount was paid under a self-assessment and made by the assessee. Initially, it filed a return of income declaring total income of Rs. 60,80,880.

That was filed on 8-1-2009. This return was processed under section 143(1)(a) of the Income Tax Act, 1961 (for short, “the Income Tax Act”) and the case was subsequently selected for scrutiny. Notices were issued and served upon the respondent assessee. During the course of the assessment proceedings, the assessing officer observed that the addition under section 14A read with rule 8D is made in past almost all assessment years. Since the facts and circumstances pertaining to the assessment year in question are identical, hence he made addition of Rs. 30,38,149.

5. This assessment order made on 29-12-2010 was challenged in Appeal by the respondent assessee. The Commissioner (Appeals) disposed of the Appeal by reducing the disallowance from Rs. 30,38,149 to Rs. 26,08,125.

During hearing of the Appeal, the assessee raised an additional ground of non-granting of interest under section 244A on the payment of Rs. 4.50 crores made in July, 2008 on estimation basis.

The Commissioner held that the assessee failed to produce any material which would demonstrate how this tax was worked out, and particularly during the course of self-assessment, and refused the relief of interest. The assessee being aggrieved and dissatisfied, approached the Tribunal.

6. The Tribunal in the impugned order held that as far as the finding of the Commissioner (Appeals) is concerned, that invocation of section 14A read with rule 8D since the assessment year in question is 2008-2009, is correct.

Therefore, the order of the Commissioner (Appeals) was upheld.

7. Then, the assessee raised the plea that interest has not been granted and after discussing the submissions in the light of the language of section 244A, the Tribunal held that it is evident that self-assessment tax is payable on the income shown in any return of income and after taking into account the amount of tax, if any, paid earlier which can also include advance tax and other credits.

Thus, the self-assessment tax includes any amount of tax which has already been paid under the provisions of the Income Tax Act. In the present case, the assessee paid tax in the month of July, 2008 for the assessment year 2008-2009.

The due date for filing return was 30-9-2008. Therefore, the Tribunal held that the tax was already paid.

8. The tax paid by the assessee for a sum of Rs. 4.50 crores is nothing but tax paid under self-assessment for the purpose of section 140A and once that is so, the assessee is entitled to interest.

9. The Tribunal followed a judgment of the Hon’ble Karnataka High Court in the case of CIT & Anr. v. Vijaya Bank, (2011) 338 ITR 489 (Kar.) and that of the Hon’ble Delhi High Court in case of CIT v. Sutlej Industries Ltd., (2010) 37 Direct Tax Reporter 25 (Del).

10. The only contention raised before us by Mr. Suresh Kumar is that this Court, on 17-11-2014, which is much after the Tribunal’s order, in the case of Stock Holding Corporation of India Limited v. N.C. Tewari, CIT & Ors., (2015) 373 ITR 282 (Bom), while allowing the Writ Petition by the assessee, relied on the very judgments including that rendered by the High Court of Delhi in the case of Sutlej Industries Ltd. (supra).

11. However, the judgment of the High Court of Delhi in Sutlej Industries Ltd. (supra) was subsequently disagreed with by another Bench of that very Court. Thereafter, the matter was carried to the Hon’ble Supreme Court of India and now, the issue/question is remanded. Mr. Suresh Kumar submits that the remand to Delhi High Court is in the light of the explanation below Clause (b) of Sub-section (1) of section 244A of the Income Tax Act.

That refers to section 156 insofar as excess payment of the demand.

12. There is no reference therein to section 140A and which is sought to be invoked in the case of the present assessee.

13. In the circumstances, he would submit that when there is a self-assessment and tax is paid in terms of such self-assessment, the obligation to award interest does not arise.

14. We do not think that it would be fair for the Revenue to demonstrate to us that the Division Bench judgment of this Court in Stock Holding Corporation of India Limited (supra), which discusses all these questions and answers them against the Revenue and in favour of the assessee, should be brushed aside or ignored. It is not shown to be per incuriam, nor is it demonstrated that this judgment has not been accepted by the Revenue, and therefore, challenged in the Hon’ble Supreme Court of India and that challenge is pending or this judgment has been reversed.

15. In the absence of such material on record, we do not think that the Division Bench judgment, which discusses all the questions and which are identical to the present case, should be discarded in this manner. Judicial discipline demands that we follow and apply it to the case at hand because the facts and circumstances are identical and equally the legal provisions.

16. In view of the Division Bench judgment of this Court in Stock Holding Corporation of India Limited (supra), we answer each of these questions against the Revenue and in favour of the assessee. They are not substantial questions of law at all. The Appeal is therefore devoid of merits and is dismissed. There shall be no order as to costs.

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