IN THE ITAT CHANDIGARH
Aarti Steels Ltd.
V/s.
Deputy Commissioner of Income-tax
C.O. NO. 31 (CHANDI) OF 2009
IT APPEAL NO. 494 (CHANDI) OF 2009
[Assessment Year 2006-07]
APRIL 18, 2012
ORDER
Mehar Singh, Accountant Member
The captioned Cross Objection, for the assessment year 2006-07, has been filed by the assessee before the Bench, in respect of appeal filed by the revenue vide ITA No. 494/Chd/2009, for the assessment year 2006-07.
2. The assessee has raised the following grounds of Cross Objections:
“1. That the ld. CIT(A) has erred in holding that the AO was justified in withdrawing the interest already allowed u/s 244A in proceedings u/s 154 of the Income-tax Act.
2. That the action of the CIT(A) is against the law and facts of the case.”
3. The ld. ‘AR’ narrated the factual background of the case, which is undisputed in nature. The grievance of the assessee is that interest granted on refund u/s 244A of the Act has been withdrawn by the revenue. He was of the opinion that the order charging interest u/s 234D of the Act, by the revenue, was set aside by the CIT(A) as well as the Tribunal. Therefore, on the same analogy, ld. ‘AR’ urged to set aside the order, withdrawing the interest, granted on refund u/s 244A of by an order passed u/s 154 of the Act.
4. Ld. ‘DR’, on the other hand, vehemently contended that the provisions of Section 244A(3) of the Income-tax Act,1961 contain clear legislative intent and, hence, the interest so withdrawn by the revenue, in terms of the said provisions, is statutorily valid.
5. We have carefully perused the rival submissions, facts of the case and the relevant records. The brief facts of the case are that assessment was framed u/s 143(3) of the Act on 28.03.2008, at the returned income of Rs. 4,09,12,748/- u/s 115JB of the Act. In terms of Section 115JB(2)(h), effective from 01.04.2001, ‘book profit’, by the amount of deferred tax and the provision thereof, which was debited in the Profit & Loss Account, was required to be increased. The AO, consequently, issued notice u/s 154 of the Act, on 21.05.2008, for the purpose of giving effect to the above referred to amended clause of Section 115JB(2)(h) of the Act. The AO proposed to add back, to the net profit, a sum of Rs. 19,14,25,910/-, representing the amount of deferred tax provisions, charged to the Profit & Loss Account. The assessee did not object to the proposed rectification u/s 154 of the Act and, consequently, the AO recomputed the income u/s 115JB of the Act at Rs. 23,23,38,658/-, as against Rs. 4,09,12,748/-, assessed originally u/s 143(3) of the Act. The AO, in the assessment order u/s 154 of the Act dated 22.05.2008 charged interest u/s 234D of the Act amounting to Rs. 9,13,378/-. The AO also withdrew interest granted to the assessee u/s 244A of the Act. Both the CIT(A) vide order dated 26.02.2009 and the Tribunal in ITA No. 494/Chd/2009 vide order dated 26.08.2010, adjudicated the issue of levy of interest u/s 234D of the Act against the revenue. A perusal of the impugned order of the Tribunal reveals that the present C.O. raised by the assessee, in respect of withdrawal of interest u/s 244A of the Act, was not adjudicated by the Tribunal. Therefore, the assessee feels aggrieved in respect of non-adjudication of the C.O.
5. (i) The assessee, has placed reliance on the decision, in the case of Bharat Conductors (P.) Ltd. v. CIT [1999] 238 ITR 89 (Kar.), CIT v. Satish Traders [2001] 247 ITR 119/114 Taxman 390 (MP) and CIT v. Hindustan Electro Graphites Ltd. [2000] 243 ITR 48/109 Taxman 342 (SC). Ld. CIT(A), as well as the Tribunal had considered these case laws in the context of levy of interest u/s 234D of the Act and gave their respective findings in favour of the assessee. The ratio of these case laws, is inapplicable to the contents and issue raised in the CO under reference. In the CO, the assessee appellant urged against withdrawal of interest by the AO and, hence, these case laws are not relevant to the facts and issues raised in the said CO.
6. A bare perusal of the provision of Section 244A of the Act, reveals that where refund of any amount becomes due to the assessee, under the Act, he shall be entitled to receive, in addition to the said amount, simple interest on the refund, calculated in the manner specified under the said Section. However, it is provided u/s 244A sub-section (3) that, if, as a result of an order passed u/s 147, 154, 155, 250, 254, 260, 262, 263, 264 or 248, the amount on which the interest was payable, has been increased/reduced, the interest shall, accordingly be increased/reduced. It is pertinent to reproduce the provisions of Section 244A for the purpose of proper appreciation of the legislative intent, contained therein :
“244A. (1) Where refund of any amount becomes due to the assessee under this Act, he shall subject to the provisions of this Section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely :
