- (1.) This appeal has been preferred by the Revenue under section 260A of the Income-tax Act, 1961 (in short, "the Act"), against the order dated August 31, 2006, annexure A3 passed by the Income-tax Appellate Tribunal, Chandigarh Bench "A" (in short, "the Tribunal") in I.T.A. No. 236/Chandi/2005 for the assessment year 1989-90, claiming the following substantial questions of law: "(1) Whether the hon'ble Income-tax Appellate Tribunal was right in directing to allow interest under section 244A(1)(b) by treating the tax paid on self-assessment as pre paid tax for the purpose? (2) Whether, on the facts and in the circumstances of the case, the hon'ble Income-tax Appellate Tribunal is correct in law in holding that the Explanation below clause (b) of sub-section (1) of section 244A is merely to stipulate the period for which the interest is to be granted? (3) Whether, on the facts and in the circumstances of the case, for the purpose of the Explanation below clause (b) of sub-section (1) of section 244A, the date of payment of tax can be understood to mean date of payment of self-assessment tax? (4) Whether, on the facts and in the circumstances of the case, the inference drawn by the hon'ble Income-tax Appellate Tribunal from the Explanation below clause (b) of sub-section (1) of section 244A is correct?" A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee-company was allowed interest under section 244A of the Act at Rs. 7,02,044 while giving effect to the order of the Tribunal. The interest was allowed on the refund due for the period from April 1, 1989, to the date of issue of refund. However, later, on the interest allowed under section 244A of the Act was withdrawn, vide order dated July 11, 2003, under section 154 of the Act. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) ("the CIT(A)"). The Commissioner of Income-tax (Appeals) dismissed the appeal, vide order dated December 30, 2004, annexure A2 and sustained the order of the Assessing Officer withdrawing interest under section 244A of the Act. Still not satisfied, the assessee filed an appeal before the Tribunal. Vide order dated August 31, 2006, annexure A3, the Tribunal partly allowed the appeal. It was held that in terms of clause (b) of section 244A(1) read with Explanation thereof, the period for which the interest can be granted is from the date on which the self-assessment tax was adjusted against the assessed income-tax and up to the date of actual grant of refund. Hence, the instant appeal by the Revenue.
(2.) We have heard learned counsel for the parties and perused the record.
(3.) Learned counsel for the Revenue submitted that the Revenue was not liable to pay interest on the self-assessment tax which was deposited by the assessee under section 140A of the Act Reference was made to the judgments reported in Saurashtra Cement and Chemical Industries Ltd. v. ITO, 1992 194 ITR 659(Guj.) [FB], CLT v. J. Pitambardas and Co., 1995 216 ITR 172 (Bom.), Saraya Sugar Mills Ltd. v. LTO, 1997 226 ITR 475 (All.), E. Philip Joseph v. LTO, 1998 234 ITR 846 (Ker.), National Horticulture Board v. Union of India, 2002 253 ITR 12 (P & H), CLT v. Ashok Leyland Ltd., 2002 254 ITR 641 (Mad.), CIT v. Shelly Products, 2003 261 ITR 367 (SC), Kerala State Civil Supplies Corporation Ltd. v. Joint CLT (Assessment), 2006 282 ITR 647 (Ker.) and CIT v. Cholamandalam Investment and Finance Co. Ltd., 2007 294 ITR 438 (Mad.).;