Wa/817/2010 Of Asst.commissioner Of Income Tax v. M/S.kerala Transport Co., Calicut

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE TUESDAY, THE 8TH DAY OF OCTOBER 2013/16TH ASWINA, 1935 WA.No. 817 of 2010 ( ) ------------------------------- AGAINST THE JUDGMENT IN WP(C) 26052/2004 of HIGH COURT OF KERALA ......... APPELLANT(S)/RESPONDENTS: ---------------------------------------------- 1. ASST.COMMISSIONER OF INCOME TAX, CIRCLE(1), CALICUT. 2. COMMISSIONER OF INCOME TAX, CALICUT. BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX RESPONDENT(S)/PETITIONER: --------------------------------------------- M/S.KERALA TRANSPORT CO., CALICUT. BY ADV. SRI.S.ARUN RAJ THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 08-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss MANJULA CHELLUR, C.J. & A.M. SHAFFIQUE, J.- - - - - - - - - - - - - - - - - - - - - - -W.A. No.817 of 2010- - - - - - - - - - - - - - - - - - - - - - - Dated this the 8[th] day of October, 2013 Shaffique, J. J U D G M E N T This appeal is filed by the revenue against the judgment of the learned Single Judge allowing the writpetition to the extent of modifying Ext.P4 order declininginterest on refund of self-assessed tax and directing theAssessing Officer to grant eligible interest on refund ofexcess self-assessed tax paid from the date of first regularassessment and adjustment till date of refund at the rateprovided under Clause (b) of Section 244A (1) of the IncomeTax Act. (hereinafter referred as the Act. 2.The facts involved in the above writ petition woulddisclose that with reference to assessment year 1990-91 theAssessee paid tax after making a self-assessment. Theassessment was completed under Section 144 of the Act on23.03.1993 as per Ext.P1. While making self assessmentthe assessee had paid a sum of Rs.13,94,620/-. An additionalamount of Rs.4,34,349/- was raised based on Ext.P1 W.A. No.817 of 2010 assessment order. The same was collected on 16.08.1993.After a series of appeals preferred by the petitioner theassessment was revised to give effect to the order dated30.01.2002 of the ITAT thus setting off the loss determinedfor the earlier year. An order was passed by the AssistantCommissioner of Income Tax under Section 154 of the Actfixing the revised total income at Rs.39,56,950/- and tax atRs.10,10,521/-. Since the petitioner had paid excess tax,the 1[st] respondent again passed an order dated 18.12.2002determining the excess tax paid by the petitioner amountingto Rs.9,40,669/- and classifying excess tax paid under twocategories. Rs.5,06,320/- paid as self-assessed tax underSection 140A and Rs.4,34,349/- as tax paid vide noticeunder Section 156 of the Act. The 1[st] respondent alsoallowed interest under Section 244A on the excess tax ofRs.4,34,349/- paid on 16.08.1993 and held that no interestunder Section 244A is payable by the department on taxpaid by way ofself-assessed tax and there is no provisionfor the same. Ext.P3 is the said order. Aggrieved by Ext.P3 the petitioner preferred a revision and the 2[nd] respondent rejected the same as per Ext.P4 order. The petitioner hadfiled the writ petition seeking a declaration that he isentitled to get interest under Section 244A (1) of the Act onthe balance refund amount of Rs.5,06,320/- and for adirection to the respondents to pay the interest on the saidamount. the petitioner preferred a revision and the 2[nd] respondent rejected the same as per Ext.P4 order. The petitioner hadfiled the writ petition seeking a declaration that he isentitled to get interest under Section 244A (1) of the Act onthe balance refund amount of Rs.5,06,320/- and for adirection to the respondents to pay the interest on the saidamount. 3. The learned Single Judge found that it is clearfrom Section 244A(1)(b) and the explanation that thedepartment cannot dispute that the assessee is entitled tointerest on refund of all payments of tax in excess of actualtax found due. It is found that if any self-assessed tax paidand adjusted against the demand was later found to berefunded, then the assessee will be entitled to get interestunder Section 244A (1) (b) of the Act on such excess taxadjusted against demand. Accordingly, the writ petitionwas allowed as stated above. The learned Single Judge found that it is clear 4.The learned counsel for the appellants based onthe explanation to Section 244A would contend that as far W.A. No.817 of 2010 as self-assessment is concerned, there cannot be any refundunder the normal circumstances. Such a procedure is nottaken care of under Section 244A (1) (b) of the Act isconcerned. Section 244A (1) (b) and explanation reads asunder: “244A. (1) Where refund of any amount becomes due tothe assessee under this Act, he shall, subject to theprovisions of this section, be entitled to receive, inaddition to the said amount, simple interest thereoncalculated in the following manner, namely:-the assessee under this Act, he shall, subject to theprovisions of this section, be entitled to receive, inaddition to the said amount, simple interest thereoncalculated in the following manner, namely:- (a)....... (b) in any other case, such interest shall becalculated at the rate of one half per cent forevery month or part of a month comprised in theperiod or periods from the date or, as the casemay be, dates of payment of the tax or penalty tothe date on which the refund is granted.calculated at the rate of one half per cent forevery month or part of a month comprised in theperiod or periods from the date or, as the casemay be, dates of payment of the tax or penalty tothe date on which the refund is granted. Explanation:- For the purposes of this clause, “date ofpayment of tax or penalty” means the date on and fromwhich the amount of tax or penalty specified in the noticeof demand issued under Section 156 is paid in excess ofsuch demand.” The argument is that going by the explanation toSection 244A (1) (b) the liability to pay interest is only inrespect of the tax paid after a demand is made undersection 156 of the Act. We do not think that such adifferentiation can be made to the aforesaid provision and W.A. No.817 of 2010 explanation does not give a different meaning at all. Anyamount due to the assessee under the Act mentioned insection 244(1) clearly takes in all forms of refund, eitherself assessed tax or tax paid as per notice under Section 156of the Act. As far as the explanation is concerned it onlyindicates the date on which the interest is liable to paid.That being the position, we do not think that there is anyillegality or perversity in the judgment of the learned SingleJudge. Accordingly, this appeal is dismissed. Sd/- MANJULA CHELLUR, CHIEF JUSTICE. Sd/-A.M. SHAFFIQUE, JUDGE.