S. 244A — Interest on excess payment of S.A. tax becomes due from the date of payment of S.A. tax.

30 (2010) TIOL 760 ITAT-Bang.

Addl. CIT v. Vijaya Bank

ITA No. 105/Bang./2009

A.Y. : 2002-03. Dated :
30-9-2010

The assessment of total
income of the assessee, a nationalised bank, was completed u/s.143(3) of the
Act. Aggrieved by the additions made by the Assessing Officer (AO) the assessee
preferred an appeal to the CIT(A) who partly allowed the appeal of the assessee.
While giving effect to the order passed by the CIT(A) the AO did not grant
interest u/s.244A on the self-assessment tax, amounting to Rs.15.50 crores, paid
by the assessee. The AO declined to pay interest on self-assessment tax on the
ground that there is no provision for allowing interest u/s.244A on the
self-assessment tax.

Aggrieved by the order of
the AO refusing to grant interest on self-assessment tax paid, the assessee
preferred an appeal to the CIT(A) who allowed the appeal filed by the assessee.
The AO pursuant to the CIT(A)’s order granted interest on self-assessment tax
paid from the date of regular assessment, as against the claim of the assessee
that the interest ought to have been calculated from the date of payment of
self-assessment tax.

Aggrieved by the order of
the AO granting interest on self-assessment tax paid from the date of regular
assessment, the assessee preferred an appeal to the CIT(A) who held that the
assessee is entitled to interest u/s.244A on the excess payment of
self-assessment tax with effect from the date on which it was paid by the
assessee and directed the AO to grant interest u/s.244A to the assessee
accordingly. He also held that the assessee is entitled to interest on interest
u/s.244A of the Act by following the decision of the SC in the case of Sandvik
Asia v. CIT, (280 ITR 643).

The Tribunal having
considered the Circular No. 549, dated 31st October, 1989 and also the decision
of the Delhi High Court in the case of CIT v. Sutlej Industries Ltd., (325 ITR
331) (Del.), which decision follows the decision of the Madras High Court in the
case of Cholamandalam Investment and Finance Co. Ltd., 294 ITR 438, upheld the
decision of the CIT(A) that the assessee is entitled to interest u/s.244A on
excess payment of self-assessment tax with effect from the date of payment of
self-assessment tax. The Tribunal held that the decision of the jurisdictional
High Court in the case of CIT v. MICO, (ITA No. 419 of 2003 dated 9th July,
2008), on which reliance was placed by the Revenue, is distinguishable on facts
since in that case the Court was dealing with payment of interest u/s.244A on
excess payment of advance tax, unlike the present case where interest is being
claimed on excess payment of self-assessment tax paid u/s.140A of the Act.