SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA, MUMBAI v. PR CIT 3, MUMBAI

ITA 3450/MUM/2015 | 2003-2004
Pronouncement Date: 04-11-2019 | Result: Dismissed

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Appeal Details

RSA Number 345019914 RSA 2015
Assessee PAN AABCS3480N
Bench Mumbai
Appeal Number ITA 3450/MUM/2015
Duration Of Justice 4 year(s) 4 month(s) 29 day(s)
Appellant SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA, MUMBAI
Respondent PR CIT 3, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 04-11-2019
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 04-11-2019
Last Hearing Date 23-08-2019
First Hearing Date 23-08-2019
Assessment Year 2003-2004
Appeal Filed On 05-06-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI SHRI PAWAN SINGH (JM) & SHRI G MANJUNATHA (AM) ITA NO. 3450/MUM/2015(ASSESSMENT YEAR: 2003-04) M/S SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA C-22 G BLOCK MSME DEVELOPMENT CENTRE BANDRA KURLA COMPLEX BANDRA (E) MUMBAI PAN : AABCS3480N VS PR. COMMISSIONER OF INCOME- TAX-3 MUMBAI APPELLANT RESPONDEDNT APPELLANT BY SHRI RAKESH JOSHI RESPONDENT BY SHRI MANJUNATHA SWAMY CIT-DR & SH.NISHANT SAMAIYA- SR. DR DATE OF HEARING 23-08-2019 DATE OF PRONOUNCEMENT 04-11-2019 O R D E R PER PAWAN SINGH JUDICIAL MEMBER : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX-3 (LD. PCIT) MUMBAI DATED 27-03-2015 PASSED UNDER SECTION 263 OF THE INCOME-T AX ACT 1961 FOR ASSESSMENT YEAR (AY) 2003-04. THE ASSESSEE HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL:- L.(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN INI TIATING PROCEEDINGS U/S.263 OF THE INCOME TAX ACT 1961 VID E SHOW-CAUSE NOTICE DATED 20.03.2015 AND PASSING THE ORDER U/S. 263 OF THE INCOME TAX ACT 1961 AND THE REASONS ASSIGNED BY HIM FOR D OING SO ARE 2 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK WRONG AND CONTRARY TO THE FACTS OF THE CASE THE PR OVISIONS OF INCOME TAX ACT 1961 AND THE RULES MADE THEREUNDER. L.(B) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE APPELLANT PRAYS THAT THE ORDER OF THE LEARNED C IT PASSED U/S.263 OF THE INCOME TAX ACT 1961 MAY BE CANCELLED BEING VOID AB-INITIO AND BAD IN LAW. L.(C) THE ID. CIT ERRED IN INVOKING PROVISIONS OF REVISIONAL JURISDICTION U/S 263 WITHOUT APPRECIATING THAT NO S UCH POWER CAN BE EXERCISED IN TERMS OF EXPLANATION (C) TO SECTION 26 3(1) BEING AN APPEAL LYING BEFORE INCOME TAX APPELLATE TRIBUNAL W ITH REGARD TO ALLOWING OF INTEREST U/S 244A OF IT ACT 1961. 1.(D) THE ID. CIT ERRED IN EXERCISING REVISIONAL JURISDICTION U/S 263 OF THE IT ACT 1961 WITHOUT APPRECIATING THAT THE I SSUE RAISED IN REGARD TO THE INTEREST ON INTEREST GRANTED U/S 244A OF IT ACT 1961 IS CONSEQUENTIAL TO CIT(A) ORDER TO DETERMINATION OF T OTAL INCOME VIDE ORDER DATED 11.03.2013 GIVING EFFECT TO CIT(A) ORDE R WHICH DOES NOT INVOLVE ANY ASSESSMENT AND AS SUCH DOING SO IS WRONG AND CONTRARY TO THE FACTS OF THE CASE THE PROVISIONS O F INCOME TAX ACT 1961 AND THE RULES MADE THEREUNDER. 2.(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN HOLDING THAT THE LEARNED AO WITHOUT APPLICATION OF MIND HAS INCORREC TLY GRANTED EXCESS REFUND OF RS. 4 04 64 132/-BEING IN THE NATU RE OF INTEREST ON INTEREST U/S 244A OF THE IT ACT 1961 AND THE REASO NS ASSIGNED BY HIM FOR DOING SO ARE WRONG AND CONTRARY TO THE FACT S OF THE CASE THE PROVISIONS OF INCOME TAX ACT 1961 AND THE RULES M ADE THEREUNDER. 2.(B) THE ID. COMMISSIONER OF INCOME TAX ERRED IN NOT APPRECIATING THE FACT THAT THE ID. ASSESSING OFFICER HAD CORRECT LY GRANTED A REFUND OF RS. 15 81 19 323/- ALONG WITH INTEREST IN TERMS OF THE PROVISION OF SECTION 244A OF THE IT ACT 1961. 2.(C) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN SET TING ASIDE THE 3 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK ORDER GIVING EFFECT DATED 11.03.2013 AND DIRECTING THE ID. ASSESSING OFFICER TO MAKE FRESH ASSESSMENT WITH REGARD TO GRA NTING OF EXCESS REFUND OF RS. 4 04 64 132/- BEING IN THE NATURE OF INTEREST ON INTEREST U/S 244A OF THE IT ACT 1961 AND THE REASONS ASSIGN ED BY HIM FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS OF THE CASE THE PROVISIONS OF INCOME TAX ACT 1961 AND THE RULES M ADE THEREUNDER. 2.(D) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO AP PRECIATE THAT THE ID. AO HAD GRANTED REFUND OF RS. 15 81 19 323/- VI DE ORDER DATED 11.03.2013 GIVING EFFECT TO CIT(A) ORDER WHICH INCL UDED INTEREST U/S 244A AS PER RULING OF SUPREME COURT IN CASE OF SAND VIK ASIA VS. CIT WHICH WAS OPERATIVE AT THAT TIME. 2. THE FACTS IN BRIEF ARE THAT A SUMMARY ASSESSMENT FO R AY 2003-04 UNDER SECTION (U/S) 143(1) WAS COMPLETED ON 31-03-2 014 GRANTING REFUND OF RS. 53 86 52 675/- ALONG WITH INTEREST AS ON 31-03-2004. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AN D ASSESSMENT U/S 143(3) WAS PASSED ON 28-01-2005. THE ASSESSING OFF ICER (AO) WHILE PASSING THE ASSESSMENT ORDER MADE VARIOUS ADDITIONS / DISALLOWANCE WHICH WAS SUBJECT MATTER OF APPEAL BEFORE CIT(A) AN D FURTHER TO TRIBUNAL AND RECTIFICATION ORDER U/S 154 RESULTING INTO EITHER DEMAND OR REFUND. THE AO WHILE GIVING EFFECT TO THE ORDE R OF CIT(A) DATED 24.12.2012 VIDE HIS ORDER DATED 11-03-2013 GRANTED REFUND OF RS.15 81 19 323/- WHICH INCLUDES REFUND OF RS.4 04 64 132/- BEING INTEREST ON INTEREST. THE ORDER DATED 11-03-2013 W AS REVISED BY LD. PCIT VIDE HIS ORDER DATED 27-03-2015 HOLDING THAT THE ORDER GIVING 4 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK EFFECT PASSED BY AO DATED 11-03-2013 IS ERRONEOU S AND PREJUDICIAL TO THE INTEREST OF REVENUE INSOFAR AS IT RELATES TO ALLOWANCE OF INTEREST ON INTEREST U/S 244A. THE AO WAS DIRECTED TO PASS THE FRESH ORDER AFTER DETAILED VERIFICATION OF FACTS AFTER GIVING OPPORTU NITY TO THE ASSESSEE. BEFORE REVISING THE ORDER THE LD. PCIT IDENTIFIED FOUR ISSUES NAMELY; I) THE ASSESSEE'S RETURN OF INCOME WAS PROCESSED SUMMA RILY VIDE ORDER U/S.143(1) DATED: 31.3.2004 AND GRANTED REFUND OF R S.53 86 52 675/- ALONG WITH INTEREST U/S 244A ON 31.03.2004. II) SUBSEQUENTLY THE INCOME WAS ASSESSED UNDER SCRUTINY ASSESSMENT PASSED U/S.143(3) OF THE I.T. ACT ON 28.01.2005. LA TER ON SERIES OF EFFECTS WERE GIVEN TO CIT(A)' ORDER ITAT'S ORDER A ND RECTIFICATIONS U/S. 154 RESULTING IN EITHER DEMAND OR REFUND. THE DETAI LS OF WHICH ARE TABULATED BELOW: ORDER U/S A.I DEMAND REFUND ALONG WITH INTEREST REFUNDED DATE 143(1) DT:31.3.2004 2217800932 538652675 31.3.2004 143(3) DT: 28. 1.2005 4028950550 154DT:22.2.2005 4028950550 768343023 EFFECT TO CIT(A)S ORDER DT: 19.6.2006 4005894927 14229049 14.11.2006 154 D T .6.3.2007 4005855927 143(3) RWS 147 DT:31.10.2008 4027359915 12162750 EFFECT TO ITAT'S ORDER DT: 19.2.2010 2436883899 875852409 29.3.2010 5 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK EFFECT TO CIT(A)S ORDER DT: 8.3.2013 2436883899 EFFECT TO CIT(AS 1 ORDER DT:1. 3. 2013 2239383336 158119323 25.3.2013 III) FOR THE YEAR UNDER CONSIDERATION AFTER GIVING EFFE CT TO CLT(A)'S ORDER DATED 11.03.2013 REFUND OF RS.15 81 19 323/- WAS GRANTED TO ASSESSEE AND IT INCLUDES EXCESS REFUND OF RS.4 04 6 4 132/- BEING IN THE NATURE OF INTEREST ON INTEREST. IV) H OWEVER FROM THE ABOVE TABLE IT IS AMPLY CLEAR THA T THE DEPARTMENT HAS NOT DELAYED THE PAYMENT OF REFUND TO THE ASSESS EE AND HENCE INTEREST ON INTEREST U/S.244A OF THE ACT IS NOT ALLOWABLE T O THE ASSESSEE. 3. ON IDENTIFYING AFORESAID FOUR ISSUES THE LD. PCIT ISSUED A SHOW CAUSE NOTICE U/S 263 DATED 20-03-2015 TO THE ASSESSEE. I N RESPONSE TO THE SHOW CAUSE NOTICE THE ASSESSEE FILED ITS REPLY DATE D 26-03-2015. IN THE REPLY THE ASSESSEE STATED THAT IT IS NOT FIT FOR R EVISION U/S 263 AS VARIOUS CLAIMS WERE ALLOWED BY AO AFTER DUE APPLICA TION OF MIND TO THE FACTS OF THE CASE. THE AO ALLOWED VARIOUS CLAI MS AFTER DUE CONSIDERATION OF PROVISIONS OF LAW AND JUDICIAL DEC ISION ON THE GRANT OF ALLEGED REFUND THE SUBSTANTIAL PART OF REPLY OF T HE ASSESSEE IS EXTRACTED AS UNDER:- ORIGINALLY ASSESSEE HAS RECEIVED REFUND OF RS. 87 58 52 409/- VIDE ORDER DATED 19.02.2010 AFTER GIVING EFFECT TO ITAT ORDER DATED 15.07.2009. THE SAID REFUND INCLUDED INTEREST OF RS. 22 94 72 710/-. THEREAFTER REFUND OF RS. 15 81 19 323/- WAS ISSUED TO THE ASSESSEE PURSUANT TO ORDER DATED 11.0 3.2013 BEING AN ORDER GIVING EFFECT TO C1T(A) ORDER DATED 24.12. 2012. IN THIS 6 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK ORDER REVISED TOTAL INCOME WAS DETERMINED AT RS.22 3 93 83 336/- AS AGAINST RS. 243 68 83 899/- DETERMINED VIDE ORDE R DATED 19.02.2010. ACCORDINGLY VIDE ORDER DATED 11.03.2013 ASSESSED IN COME HAS BEEN REVISED TO 1 A REDUCED FIGURE OF RS. 19 75 00 563/- WHICH HAS RESULTED INTO REFUND OF TAX 1 PLUS INTEREST ON RS. 11 74 25 616/-. THEREFORE ASSESSEE HAS NOT RECEIVED ANY I INTEREST ON INTEREST U/S 244A. THE RESULTANT REFUND DUE TO AN ORDER GIVING \ EFFECT TO C1T(A) DATED 11.03.2013 CANNOT BE TREATED AS EXCESS REFUND GRANTED \ BY WAY OF INTEREST ON INTEREST OF RS. 4 0 6 60 132/- AS THAT HAS BEEN CONSIDERED / GOODSELF WHICH IS NOT CORREC T. 4. THE ASSESSEE ALSO STATED THAT ASSESSEE HAS RECEIVED A REFUND OF RS.15 81 19 323/- AFTER GIVING EFFECT TO THE ORDER OF CIT(A) DATED 24.12.2012. THE REFUND WHICH WAS RECEIVED BY THE A SSESSEE WAS ADJUSTED AGAINST THE INTEREST AMOUNT FIRST AND BALA NCE IF ANY WAS ADJUSTED AGAINST TAX AMOUNT. THE ASSESSEE RELIED U PON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD V S CIT 150 TAXMAN 591 (SC). THE ASSESSEE FINALLY STATED T HAT THERE WAS NO ERROR IN GRANTING INTEREST ON INTEREST LEADING TO E XCESS REFUND AND HENCE PROVISIONS OF SECTION 263 WERE NOT APPLICABL E IN THE PRESENT CASE. THE ASSESSEE REQUESTED TO DROP THE PROCEEDIN GS U/S 263. 5. THE REPLY FILED BY ASSESSEE WAS NOT ACCEPTED BY LD. PCIT BY TAKING VIEW THAT EXCESS REFUND OF AMOUNT OF RS.4 04 64 132 /- IS GRANTED IN SPITE OF THE FACT THAT NOWHERE DEPARTMENT WITHHELD / RETAINED THE 7 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK PAYMENT OF INTEREST WHEREIN REFUND OF TAX WAS DUE. THE REFUND OF TAX ALONG WITH INTEREST WAS GRANTED AFTER GIVING EF FECT TO THE APPELLATE ORDER AND RECTIFICATION ORDERS AND THE AS SESSEE WAS NOT ELIGIBLE FOR ANY COMPENSATION IN THE FORM OF INTERE ST ON INTEREST U/S 244A. THE LD. PCIT FURTHER HELD THAT AS PER PROVIS IONS OF SECTION 244A OF THE ACT THE STATUTE PROVIDE THE GRANT OF S IMPLE INTEREST ON ANY EXCESS PAYMENT OF TAX FOR THE PERIOD STARTING F ROM 01 ST APRIL OF THE RELEVANT ASSESSMENT YEAR UP TO THE DATE OF REFU ND. THERE IS NO SPECIFIC PROVISION U/S 244A TO GRANT INTEREST ON IN TEREST. SECTION 244A PROVIDED INTEREST ONLY ON THE AMOUNT OF REFUND OUT OF TAX PAID BY THE ASSESSEE OR COLLECTED FROM THE ASSESSEE AND NOT ON THE AMOUNT DUE TO THE ASSESSEE INCLUDING INTEREST. 6. ON THE RELIANCE OF THE ASSESSEE ON THE DECISION OF HON BLE SUPREME COURT IN SANDVIK ASIA LTD VS CIT (SUPRA) T HE LD. PCIT DISTINGUISHED THE SAID CASE QUA THE FACTS OF PRESEN T CASE; IN THE SAID CASE THE INTEREST WAS RETAINED BY THE DEPARTMENT F OR A PERIOD RANGING UP TO 17 YEARS AND THE ASSESSEE WAS DEPRIVE D OF AN AMOUNT OF INTEREST FOR THE PERIOD UP TO 17 YEARS WHEREIN T HE HON BLE SUPREME COURT ALLOWED INTEREST AS COMPENSATION. TH E LD. PCIT FURTHER HELD THAT THE RATIO OF LAW IN SANDVIK ASIA LTD VS CIT (SUPRA) 8 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK WAS DISCUSSED D BY ITAT AHMEDABAD IN GUJARAT STAT E FERTILIZERS & CHEMICALS LTD VS DCIT (ITA 2348-2349/AHD/2004(AY 1995- 96) DATED 31-07-2006 WHEREIN IT WAS HELD THAT THE INCOME TAX AUTHORITIES CANNOT PAY INTEREST ON INTEREST UNLESS STATUE PROVIDES AND IT CANNOT BE GRANTED ON THE GROUND OF EQUITY. THE LD. PCIT FINALLY CONCLUDED THAT REFUND IS TO BE GIVEN ALONG WITH INTEREST WHICH IS TO BE CALCULATED AS PER SECTION 244A OF TH E ACT AND IF THE INTEREST IS PAID ON THE EXCESS TAX NO FURTHER PAYM ENT IS TO BE MADE. IT IS ONLY WHEN EXCESS AMOUNT OF TAX IS REFUNDED B UT THE INTEREST IS NOT REFUNDED ALONG THEREWITH THE RETENTION OF INTE REST AMOUNT WOULD BE UNJUSTIFIED AND INTEREST ON INTEREST WOULD ALSO BECOME PAYABLE. THUS THE ASSESSEE HAS BEEN ERRONEOUSLY ALLOWED EXC ESS REFUND; THEREBY ORDER GIVING EFFECT DATED 11-03-2013 IS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. AGGRIEVED BY THE ORDER OF PCIT DATED 27-03-2015 PASSED U/S 263 THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 7. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORISED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENT ATIVE (DR) FOR THE REVENUE AND CAREFULLY GONE THROUGH THE ORDERS O F LD. P CIT. THE LD.AR OF THE ASSESSEE SUBMITS THAT THE ORDER DATED 11-03-2013 PASSED BY THE AO IS NEITHER ERRONEOUS NOR PREJUDICI AL TO THE INTEREST 9 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK OF THE REVENUE. THE AO PASSED THE ORDER AFTER PROP ER APPLICATION OF MIND AND VERIFICATION OF FACTS. THE AO HAS GRANTED REFUND IN ACCORDANCE WITH THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF SANDVIK ASIA LTD VS CIT (SUPRA). THE DECIS ION RENDERED BY HON BLE SUPREME COURT IS BINDING AS PER ARTICLE 141 OF THE CONSTITUTION OF INDIA. THEREFORE THE AO PASSED TH E ORDER IN ACCORDANCE WITH THE MANDATE OF LAW DETERMINED BY HO N BLE APEX COURT WHICH CANNOT BE CONSIDERED AS ERRONEOUS FOR REVISING THE ORDER. THE TWIN CONDITION AS ENUNCIATED U/S 263 I .E. ORDER IS ERRONEOUS AND INSOFAR AS IT IS PREJUDICIAL TO THE I NTEREST OF REVENUE MUST BE SATISFIED FOR REVISING THE ORDER. THE LD.A R OF THE ASSESSEE HAS STRONGLY RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN SANDVIK ASIA LTD VS CIT (SUPRA). 8. ON THE OTHER HAND THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LD. PCIT. THE LD. DR HAS SUBMITTED THAT THE ORD ER PASSED BY AO DATED 11-03-2013 IS NOT ONLY ERRONEOUSLY BUT ALS O PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. DR FOR THE REVENU E BESIDES STRONGLY RELYING UPON THE ORDER OF LD PCIT ALSO REL IED ON THE FULL BENCH DECISION OF HON BLE APEX COURT IN CIT VS GUJARAT FLOURO CHEMICALS (2014) 42 TAXMANN.COM 1. THE LD. DR FOR THE REVENUE 10 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK FURTHER SUBMITS THAT IN CIT VS GUJARAT FLOURO CHEMI CALS (SUPRA) THE FULL BENCH OF HON BLE APEX COURT CLARIFIED THAT IN SANDVIK ASIA (SUPRA) THERE WAS AN INORDINATE DELAY OF DECAD ES ON THE PART OF THE REVENUE IN REFUNDING CERTAIN AMOUNT WHICH INCLU DED STATUTORY INTEREST THE HON BLE COURT DIRECTED THE REVENUE HAS TO PAY COMPENSATION FOR SAME AND NOT AN INTEREST ON INTERE ST AND THAT CASE WAS BASED ON SPECIFIC FACTS. HOWEVER IN THE INSTA NT CASE THERE IS NEITHER DELAY ON THE PART OF THE REVENUE IN MAKING REFUND NOR IN PASSING THE ORDER OF GIVING EFFECT TO THE ORDER OF HIGHER / APPELLATE AUTHORITY. THEREFORE THE RATIO OF DECISION IN SAN DVIK ASIA LTD VS CIT (SUPRA) IS NOT APPLICABLE. THE AO GRANTED EXCE SS REFUND OF RS.4.04 CRORES THE ORDER IS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND CAREFULLY DELIBERATED ON VARIOUS CASE LAWS RELIED U PON BY LEARNED REPRESENTATIVES OF THE PARTIES. IN OUR VIEW THE F IRST QUESTION FOR OUR CONSIDERATION IS WHETHER THE ORDER GIVING EFFECT D ATED 11.03.2013 PASSED BY AO IN GRANT OF REFUND OF RS.15 81 19 923/ - WHICH INCLUDED REFUND OF RS.4 04 64 132/- BEING INTEREST ON INTEREST IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. THERE IS NO 11 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK DISPUTE THAT THE AO GRANTED ADDITIONAL INTEREST OF RS.4.04 64 132/- WHICH IS IN ADDITION TO THE INTEREST U/S 244A AND THE SAME IS DEFENDED BY LD AR FOR THE ASSESSEE BY TAKING BENEFI T OF DECISION OF SANDVIK ASIA LTD (SUPRA). THE OTHER/ SECOND QUESTI ON IS WHETHER THERE IS INORDINATE DELAY OR IN AN ORDINARY MANNER WHILE GRANTING REFUND. FROM THE DATES AND EVENTS WHICH IS SUMMARI SED BY LD. PCIT AT PARA 2.1 OF HIS ORDER WE FIND THAT THE TRIB UNAL PASSED THE ORDER ON 19-02-2010 AND REFUND WAS GRANTED ON 29-03 -2010. FURTHER THE CIT (A) PASSED THE ORDER ON 24.12.2012 AND ORDER GIVING EFFECT WAS PASSED BY AO ON 11-03-2013 AND AC CORDINGLY THE REFUND ORDER WAS ISSUED. THUS THERE IS NO DELAY W HICH COULD BE SAID TO BE INORDINATE DELAY ON THE PART OF THE REVE NUE IN GRANTING REFUND. 10. THE FULL BENCH OF HON BLE SUPREME COURT IN CIT VS. GUJARAT FLOURO CHEMICALS (SUPRA) WHILE CONSIDERING THE CORR ECTNESS OF DECISION IN SANDVIK ASIA LTD VS CIT (SUPRA) ON THE QUESTION WHETHER INTEREST IS PAYABLE BY THE REVENUE TO THE A SSESSEE IF AGGREGATE INSTALMENT OF ADVANCE-TAX OF TDS PASSED T HE FOLLOWING ORDER. FOR COMPLETENESS OF THE ORDER AND TO UNDERS TAND THE RATIO OF SANDVIK ASIA LTD VS CIT (SUPRA) AND THE DECISION OF FULL BENCH OF 12 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK HON BLE SUPREME COURT IN GUJARAT FLOURO CHEMICALS (SUPR A) THE ENTIRE ORDER OF FULL BENCH OF HON BLE APEX COURT IS EXTRACTED BELOW:- 1. DOUBTING THE CORRECTNESS OR OTHERWISE OF THE DECIS ION OF THIS COURT IN THE CASE OF SANDVIK ASIA LTD. V. CIT [2006] 280 ITR 643/150 TAXMAN 591 A BENCH OF TWO LEARNED JUDGES HAS REFERRED THE FO LLOWING QUESTION OF LAW FOR OUR CONSIDERATION AND AUTHORITATIVE PRONOUN CEMENT BY ORDER DATED 28.08.2012: 'THE QUESTION WHICH ARISES IN THIS CASE IS WHETHER INTEREST IS PAYABLE BY THE REVENUE TO THE ASSESSEE IF THE AGGRE GATE OF INSTALLMENTS OF ADVANCE TAX OF TDS PAID EXCEEDS THE ASSESSED TAX?' 2. IN THE AFORESAID ORDER OF REFERENCE THIS COURT HA S BRIEFLY NOTICED THE FACTS AND THE DISCUSSION IN SANDVIK ASIA LTD.'S CASE ( SUPRA ) WHEREIN THE MAIN ISSUE FOR CONSIDERATION AND DETERMINATION BY T HIS COURT WAS WHETHER THE ASSESSEE IS ENTITLED TO BE COMPENSATED BY THE REVENUE FOR DELAY IN PAYMENT OF THE AMOUNT ADMITTEDLY DUE TO TH E ASSESSEE. THIS COURT HAS NOTICED INTER ALIA THE PROVISIONS OF SECTION 214 OF THE INCOME TAX ACT 1961 (FOR SHORT 'THE ACT') AND IN LIGHT OF THE SAME HAS DOUBTED THE CORRECTNESS OF THE DECISION IN SANDVIK ASIA LTD.'S CASE ( SUPRA ). 3. IN ORDER TO ANSWER THE AFORESAID ISSUE BEFORE US WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF THIS COURT IN SANDVIK ASIA LTD.'S CASE ( SUPRA ) AND THE ORDER OF REFERENCE. WE HAVE ALSO CONSIDER ED THE SUBMISSIONS MADE BY THE PARTIES TO THE LIS. 4. WE WOULD FIRST THROW LIGHT ON THE REASONING AND TH E DECISION OF THIS COURT ON THE CORE ISSUE IN SANDVIK ASIA LTD.'S CASE ( SUPRA ). THE ONLY ISSUE FORMULATED BY THIS COURT FOR ITS CONSIDERATIO N AND DECISION WAS WHETHER AN ASSESSEE IS ENTITLED TO BE COMPENSATED B Y THE INCOME TAX DEPARTMENT FOR THE DELAY IN PAYING INTEREST ON THE REFUNDED AMOUNT ADMITTEDLY DUE TO THE ASSESSEE. THIS COURT IN THE F ACTS OF THE SAID CASE 13 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK HAD NOTICED THAT THERE WAS DELAY OF VARIOUS PERIODS RANGING FROM 12 TO 17 YEARS IN SUCH PAYMENT BY THE REVENUE. THIS COUR T HAD FURTHER REFERRED TO THE SEVERAL DECISIONS WHICH WERE BROUGH T TO ITS NOTICE AND ALSO REFERRED TO THE RELEVANT PROVISIONS OF THE ACT WHIC H PROVIDE FOR REFUNDS TO BE MADE BY THE REVENUE WHEN A SUPERIOR FORUM DIRECT S REFUND OF CERTAIN AMOUNTS TO AN ASSESSEE WHILE DISPOSING OF AN APPEAL REVISION ETC. 5. SINCE THERE WAS AN INORDINATE DELAY ON THE PART O F THE REVENUE IN REFUNDING THE AMOUNT DUE TO THE ASSESSEE THIS COURT HAD THOUGHT IT FIT THAT THE ASSESSEE SHOULD BE PROPERLY AND ADEQUATELY COMP ENSATED AND THEREFORE IN PARAGRAPH 51 OF THE JUDGMENT THE COUR T WHILE COMPENSATING THE ASSESSEE HAD DIRECTED THE REVENUE TO PAY A COMP ENSATION BY WAY OF INTEREST FOR TWO PERIODS NAMELY; FOR THE ASSESSMEN T YEARS 1977-78 1978-79 1981-82 1982-83 IN A SUM OF RS.40 84 906/ - AND INTEREST @ 9% FROM 31.03.1986 TO 27.03.1998 AND IN DEFAULT TO PA Y THE PENAL INTEREST @ 15% PER ANNUM FOR THE AFORESAID PERIOD. 6. IN OUR CONSIDERED VIEW THE AFORESAID JUDGMENT HAS BEEN MISQUOTED AND MISINTERPRETED BY THE ASSESSEES AND ALSO BY THE REVENUE. THEY ARE OF THE VIEW THAT IN SANDVIK ASIA LTD.'S CASE ( SUPRA ) THIS COURT HAD DIRECTED THE REVENUE TO PAY INTEREST ON THE STATUTORY INTERE ST IN CASE OF DELAY IN THE PAYMENT. IN OTHER WORDS THE INTERPRETATION PLA CED IS THAT THE REVENUE IS OBLIGED TO PAY AN INTEREST ON INTEREST IN THE EV ENT OF ITS FAILURE TO REFUND THE INTEREST PAYABLE WITHIN THE STATUTORY PERIOD. 7. AS WE HAVE ALREADY NOTICED IN SANDVIK ASIA LTD.'S CASE ( SUPRA ) THIS COURT WAS CONSIDERING THE ISSUE WHETHER AN ASSESSEE WHO IS MADE TO WAIT FOR REFUND OF INTEREST FOR DECADES BE COMPENSATED F OR THE GREAT PREJUDICE CAUSED TO IT DUE TO THE DELAY IN ITS PAYMENT AFTER THE LAPSE OF STATUTORY PERIOD. IN THE FACTS OF THAT CASE THIS COURT HAD C OME TO THE CONCLUSION THAT THERE WAS AN INORDINATE DELAY ON THE PART OF T HE REVENUE IN REFUNDING CERTAIN AMOUNT WHICH INCLUDED THE STATUTORY INTERES T AND THEREFORE DIRECTED THE REVENUE TO PAY COMPENSATION FOR THE SA ME NOT AN INTEREST ON INTEREST. 14 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK 8. FURTHER IT IS BROUGHT TO OUR NOTICE THAT THE LEGIS LATURE BY THE ACT NO. 4 OF 1988 (W.E.F. 01.04.1989) HAS INSERTED SECTION 24 4A TO THE ACT WHICH PROVIDES FOR INTEREST ON REFUNDS UNDER VARIOUS CONT INGENCIES. WE CLARIFY THAT IT IS ONLY THAT INTEREST PROVIDED FOR UNDER TH E STATUTE WHICH MAY BE CLAIMED BY AN ASSESSEE FROM THE REVENUE AND NO OTHE R INTEREST ON SUCH STATUTORY INTEREST. 9. WITH THE AFORESAID CLARIFICATION WE NOW REFER BACK ALL THE MATTERS BEFORE A TWO JUDGE BENCH OF THIS COURT TO CONSIDER EACH CASE INDEPENDENTLY AND TAKE AN APPROPRIATE DECISION ONE WAY OR THE OTHER. 11. IN VIEW OF THE AFORESAID FACTUAL AND LEGAL DISCUSSI ON WE ARE OF THE VIEW THAT THE CASE LAW IN SANDVIK ASIA LTD (SUPRA) IS NOT HELPFUL TO THE ASSESSEE. AS WE HAVE ALREADY HELD THAT THERE W AS NO INORDINATE DELAY ON THE PART OF THE REVENUE IN ISSUING THE REF UND ORDER IN OUR VIEW THE ORDER GIVING EFFECT DATED 11-03-2013 IS NO T ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. AC CORDINGLY THE ORDER PASSED BY LD. PCIT FULFILS THE TWIN CONDITION OF SECTION 263 OF THE ACT. THEREFORE WE DO NOT FIND ANY MERIT IN T HE APPEAL FILED BY THE ASSESSEE WHICH IS HEREBY DISMISSED. 12. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-11-201 9. SD/- SD/- (G.MANJUNATHA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI DT : 4 TH NOVEMBER 2019 PK/- 15 ITA 3450/MUM/2015 SMALL INDUSTRIAL DEVELOPMENT BANK COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR ITAT MUMBAI