M/S Canara Bank , Bangalore vs Department Of Income Tax
- CitationITA No.287/Bang/2014
Ratio decidendi
The rule this decision rests on
Where the assessing officer, while giving effect to an appellate or rectification order, has withheld relief under section 90 that was granted in earlier orders and has recorded no reasons for withholding it, the appellate authority may restore that relief; the omission to give reasons renders the withholding unsustainable and the relief stands. Where interest under section 244A is computed on a refund, the interest is to be allowed only as provided by the statute, and the refund is first to be adjusted against the interest due and thereafter the balance is to be refunded; interest on interest is not to be allowed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Joint Commissioner of Income-tax, LTU, Bangalore. ... Appellant
Vs.
M/s.Canara Bank, Accounts Section (HO), 112, JC Road, Bangalore. ... Respondent PAN:AAACC6106G
Appellant by: Shri G.R.Reddy, CIT(DR). Respondent by: Shri G.Sarangan, Advocate.
Date of hearing : 08/07/2015 Date of pronouncement: 24/07/2015
O R D E R
Per Smt.P.MADHAVI DEVI, JM:
This appeal by the revenue is against the order of the
CIT(A), LTU, Bangalore, dated 25/11/2013 for the assessment
year 2005-06. The Revenue has raised the following grounds of
appeal:
1. The order of Ld.CIT(A) is opposed to law and facts of the case.
2. The Ld CIT(A) erred in allowing the assessee's claim on the issue of relief u/s 90, even though ITA No.287/Bang/2014 M/s. Canara Bank
Page 2 of 6 the same was not given to assessee in the assessment order and the assessee's rectification application on the issue had been rejected for want of evidence.
3. The Ld CIT(A) erred in computing interest u/s 244A payable to the assessee by charging interest on interest, which is not envisaged in the Income-tax Act.
4. For these and such other grounds that may be urged at the time of hearing.
2. Grounds of appeal No.1 and 4 are general in nature and
need no adjudication. As regards the other grounds are
concerned, brief facts of the case are that the assessment order
passed u/s 143(3) of the Income-tax Act, 1961 [hereinafter
referred to as 'the Act' for short] against which an appeal was
filed before CIT(A) while the appeal was pending, the assessment
order was revised u/s 263 of the Act vide order dt.03/02/2011.
On appeal, the ITAT has quashed the order u/s 263 consequent
to which the CIT(A),LTU order dated 17/03/2010 got revived.
While giving effect to the order of the CIT(A),LTU dated
17/03/2010 the AO did not allow relief u/s 90 for double taxation
relief of Rs.4,70,79,728/- u/s 90 of the Act, which was allowed in
earlier orders. Further, as regards the calculation of interest u/s
244A also, according to the assessee, AO did not allow interest
u/s 244A correctly.
3. Aggrieved, assessee preferred an appeal before the CIT(A)
who allowed the same and the revenue is in appeal before us. ITA No.287/Bang/2014
M/s. Canara Bank
Page 3 of 6
4. As regards ground No.2 relating to the relief u/s 90 of the
Act, the learned Departmental Representative submitted that the
assessee was not eligible for the said relief and therefore the AO,
while giving effect to the order of the CIT(A), has not given such
relief and the CIT(A) has erroneously granted relief which has to
be aside. The learned counsel for the assessee, on the other
hand, submitted that the AO, while giving effect to the CIT(A)'s
order dated 31/12/2009 against the assessment order u/s 143(3)
dated 24/12/2008, had granted relief of Rs.4,70,79,728/- u/s 90
of the Act and further even while giving effect to the order u/s
263 of the Act, the said relief was and while rectifying the order
of giving effect to the order of the CIT(A) dated 15/2/2011 also
the relief u/s 90 was given. He submitted that inadvertently, the
AO, while giving effect to the order of the CIT(A), LTU,
consequent to the quashing of the order u/s 263, has failed to
give such relief to the assessee and the CIT(A) after verifying the
records has allowed deduction to the assessee holding that the
AO has not given any reasons for withholding it while giving effect
to the ITAT's order. Copies of the earlier orders of the AO giving
effect to the orders of the CIT(A) and rectification order are filed.
5. Upon considering the contentions of both the parties, we
find that the AO has not disallowed relief u/s 90 of the Act in the
assessment order though he had given relief to the assessee
while giving effect to the order of the CIT(A), order u/s 263 as
well as u/s 154 of the Act. As rightly observed by the CIT(A), the ITA No.287/Bang/2014 M/s. Canara Bank
Page 4 of 6 AO has not given any reasons for not allowing the said relief of
double taxation u/s 90 of the Act to the assessee while giving
effect to the order of the Tribunal. Therefore, we are satisfied
that the CIT(A) has rightly granted relief to the assessee.
Therefore, we do not see any reason to interfere with the order of
the CIT(A) and ground No.2 of the revenue is rejected.
6. As regards ground No.3, brief facts are that while giving
effect to the order of the Tribunal, the AO has calculated interest
u/s 244A at Rs.46,48,72,322/-. Aggrieved, assessee preferred an
appeal before the CIT(A) stating that the calculation is incorrect.
The CIT(A) recalculated the interest u/s 244A and directed the AO
to allow the refund after verifying the correctness of the dates
from the record. The CIT(A) also observed that the decision of
the Hon'ble Supreme Court in the case of Sandvik Asia Ltd.
reported in 280 ITR 643 has been clarified by the Hon'ble
Supreme Court in SLP(C) No.11406 of 2008 in the case of CIT vs.
Gujarat Fluro Chemicals & others holding that the decision of the
Apex Court in the case of Sandvic Asia had been mis-interpreted
and only interest provided under the statute u/s 244A has to be
allowed on refund and not interest on interest in case of delay.
While the learned Departmental Representative supported
the order of the AO giving effect to the order of the Tribunal, the
learned counsel for the assessee supported the order of the
CIT(A) and also placed reliance upon the decision of the co- ITA No.287/Bang/2014
M/s. Canara Bank
Page 5 of 6 ordinate bench of the tribunal in the case of Syndicate Bank in
ITA Nos.1700 to 1704/Bang/2013 dated 30/06/2015. It is
submitted that this Tribunal, in the case of Syndicate bank has
considered various judicial precedents on the issue to hold that
adjustment of the tax refund should be made first to the interest
due and thereafter to the tax refund. Copy of the said order is
filed before us.
7. Having regard to the rival contentions and the material on
record, we find that the CIT(A) also has taken note of the
judgment of the Apex Court in the case of Gujarat Fluro
Chemicals & others (cited supra) and computed the interest
accordingly and has directed the AO to allow refund after
verifying the correctness of the dates. We, therefore, see no
reason to interfere with the order of the CIT(A) and direct the AO
to allow the refund by first adjusting refund to the interest due
and thereafter to the tax refund. Accordingly, ground No.3 is also
rejected.
8. In the result, the revenue's appeal is dismissed.
Pronounced in the open court on 24th July, 2015.
sd/- sd/- (Abraham P George) (Smt. P.Madhavi Devi) ACCOUNTANT MEMBER JUDICIAL MEMBER eksrinivasulu ITA No.287/Bang/2014 M/s. Canara Bank
Page 6 of 6
Copy to:
1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file
By order
Assistant Registrar Income-tax Appellate Tribunal Bangalore
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