Self-Assessment Tax paid in excess of Tax Payable is eligible for Interest

CIT Vs The Kerala Minerals And Metals Ltd. (Kerala High Court)

The issue raised in the above appeal by the department is as to whether the assessee, who made a self assessment of tax and paid tax, far in excess of that determined under the regular assessment; is entitled to interest on the refund. The issue is no longer res integra having been answered by a Division Bench of this Court affirming the view of a learned Single Judge in W.A No. 817/2010 dated 08.10.2013.

2. Extracting Section 244A (1) (b) of the Income Tax Act, 1961. It was held so:

“The argument is that going by the explanation to Section 244A (1) (b) the liability to pay interest is only in respect of the tax paid after a demand is made under section 156 of the Act. We do not think that such a differentiation can be made to the aforesaid provision and explanation does not give a different meaning at all. Any amount due to the assessee under the Act mentioned in section 244(1) clearly takes in all forms of refund, either self assessed tax or tax paid as per notice under Section 156 of the Act. As far as the explanation is concerned it only indicates the date on which the interest is liable to paid. That being the position, we do not think that there is any illegality or perversity in the judgment of the learned Single Judge.

Accordingly, this appeal is dismissed. ”

In the aforesaid circumstance, the assessee would be entitled to the interest on the excess tax paid. The question raised in the Income Tax Appeal is answered against the Department in favour of the assessee, affirming the order of the Tribunal, respectfully following the binding precedent cited above.