- (1.) WHEN the appeal was admitted the following questions of law were framed: "1. Whether on the facts and circumstances of the case the Learned Tribunal is justified in law in holding that the Assessing Officer has no jurisdiction to exercise the power of rectification under section 154 of the Income -tax Act, 1961?
(2.) WHETHER on the facts and circumstances of the case, the Learned Tribunal was justified in law by not holding that Section 244A of the Income -tax Act, 1961 provides for interest on refunds under various contingencies, it is only that interest provided for under the statute which may be claimed by the Assessee from the Revenue and no other interest on such statutory interest - Briefly stated, facts and circumstances of the case, are that the Assessing Officer while passing order under section 143(3) allowed interest upon interest. He, however, sought to recall the order granting interest upon interest by resorting to proceeding under section 154 of the Income -tax Act. The order passed by him was upheld by the CIT(A) but in an appeal preferred by the assessee, the learned Tribunal has set aside the order passed in exercise of jurisdiction under section 154 of the Income -tax Act. 2. Mr. Bhowmik, learned advocate appearing for the revenue submitted that the judgement of the Supreme Court in the case of CIT v. Gujarat Fluoro Chemicals : [2014] 222 Taxman 349 : 42 taxmann.com 1 has differed with the earlier views expressed in the case of Sandvik Asia Ltd. v. CIT : [2006] 280 ITR 643 : 150 Taxman 591 (SC) wherein interest upon interest was allowed. Mr. Bhowmik contended that since the law has been modified by the judgement in the case of Gujarat Fluoro Chemicals (supra) the assessing officer was entitled to exercise jurisdiction under section 154.
(3.) MR . Khaitan, learned Senior Advocate appearing for the assessee/respondent submitted that the judgement in the case of Gujarat Fluoro Chemicals (supra) has not noticed an earlier judgment of the Supreme Court of equal strength in the case of CIT v. Heg Ltd. : [2010] 324 ITR 331 : 189 Taxman 335 SC wherein following views were taken : "...The next question which we are required to answer is -what is the meaning of the words "refund of any amount becomes due to the assessee" in section 244A ? In the present case, as stated above, there are two components of the tax paid by the assessee for which the assessee was granted refund, namely TDS of Rs. 45,73,528 and tax paid after original assessment of Rs. 1,71,00,320. The Department contends that the words "any amount" will not include the interest which accrued to the respondent for not refunding Rs. 45,73,528 for 57 months. We see no merit in this argument. The interest components will partake of the character of the 'amount due' under section 244A. It becomes an integral part of Rs. 45,73,528 which is not paid for 57 months after the said amount became due and payable. As can be seen from the facts narrated above, this is the case of short payment by the Department and it is in this way that the assessee claims interest under section 244A of the Income -tax Act. Therefore, on both the aforestated grounds, we are of the view that the assessee was entitled to interest for 57 months on Rs. 45,73,528. The principal amount of Rs. 45,73,528 has been paid on December 31, 1997 but net of interest which, as stated above, partook of the character of "amount due" under section 244A.";