Total Pageviews

Monday 14 December 2015

Issue of Interest on Refund of Self Assessment tax : Bombay High Court in Stock Holding Corporation [17-11-2014] and Punjab and Haryana High Court in Punjab Chemical & Crop Protection Ltd [25-08-2014] have pronounced that interest on refund of self assessment tax is entitled u/s 244A(1)(b).However Delhi High Court in Engineers India Ltd [2015] 55 taxmann.com 1 (Delhi) FEBRUARY 26, 2015 had held that no interest u/s 244A can be paid on refund of self assessment tax u/s 244A(1)(b)because Expl below 244A(1)(b) defines expression "date of payment of tax or penalty" means the date on and from which the amount of taxes or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand.” while self assessment tax is not paid in pursuance of notice u/s 156. Now Madras High Court in Rajaratna Mills Ltd [2015] 64 taxmann.com 89 (Madras) AUGUST 18, 2015 resolving the issue of interpretation of Explanation to S. 244A(1) has held that Assessee is entitled to interest on refund of self assessment tax because of substantive part of sub-section (1) of section 244A. The explanation to section 244A does not really talk about the entitlement or disentitlement. It only defines expression "date of payment of tax or penalty" .The above explanation does not give room for an interpretation that if a person has paid money otherwise than by way of demand under section 156, he is not entitled to interest on refund under section 244A. The explanation cannot, really, curtail the method of computation prescribed in clause (b) or the substantive part of section 244A