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IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI

BEFORE SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM

ITA No.6130/Mum/2014
(A.Y:2004 -05)

Asst. Commissioner of Income Bharat Petroleum Corporation

Tax 2(1) Ltd.
R. No. 561, 5th Floor, Aayakar Bharat Bhavna, 4&6 Currimbhoy
Vs.
Bhavan, M.K. Rd, Mumbai-400 020 Rd, Ballard Estate
Mumbai-400 001
PAN No. AAACB2902M
Appellant .. Respondent

ITA No.4268/Mum/2016
(A.Y:2004 -05)

Bharat Petroleum Corporation Asst. Commissioner of Income

Ltd. Tax 2(1)
Bharat Bhavna, 4&6 Currimbhoy R. No. 561, 5th Floor, Aayakar
Vs.
Rd, Ballard Estate Bhavan, M.K. Rd,
Mumbai-400 001 Mumbai-400 020
PAN No. AAACB2902M
Appellant .. Respondent
Revenue by .. Shri K. Ravi Ramachandran, DR
Assessee by .. Shri J.D. Mistri, AR
Date of hearing .. 14-06-2017
Date of pronouncement .. 12-07-2017

ORDER
PER MAHAVIR SINGH, JM:

These cross appeals are arising out of the order of CIT(A)-4,

Mumbai, in appeal No. CIT(A)-4/IT-140/DCIT-2(1)/2013-14 dated 14-05-
2013. The rectification order passed by DCIT Circle-2(1), Mumbai for the
A.Y. 2004-05 vide order dated 28-07-2014 u/s 154 of the Income Tax Act,
1961 (hereinafter ‘the Act’).

2. The only issue in these cross appeals is against the order of CIT(A)
in directing the AO to grant interest under section 244A(1)(b) of the Act
on self assessment tax paid from the date of assessment order and not
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ITA No . 61 3 0/ Mu m/ 20 1 4 &
ITA No . 42 6 8/ Mu m/ 20 1 6
Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 )

from the date of payment of self assessment tax. For this Revenue has
raised following two grounds: -

“1. On the facts and in the circumstances of

the case and in law, the Ld. CIT(A) erred in
interpreting the provision of Section 244A(1)(b)
of IT Act.

2. On the facts and in the circumstances of

the case and in law, the Ld. CIT(A) erred in
directing the AO to grant interest u/s 244A(1)(b)
on excess SA tax paid without appreciating the
fact that in view of Explanation to Section
244A(1)(b), the interest is payable only on the
amount of tax paid in excess of tax/penalty
specified in notice of demand issued u/s 156 of
the IT Act.”

For this assessee has raised following three grounds: -

“1. The learned Commissioner of Income Tax

[CIT(A)] ought to have directed that the
assessee is entitled to interest u/s 244A(1)(b)
from the date of payment of Self-Assessment
Tax (28.04.2004) to the date on which refund of
excess Self-Assessment Tax was granted
(22.02.12).

2. The learned Commissioner of Income Tax

[CIT(A)] erred in holding that the assessee was
entitled to interest on refund of excess Self-
Assessment tax from the date of the
assessment order and not from the date of
payment of Self-Assessment Tax.

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ITA No . 61 3 0/ Mu m/ 20 1 4 &
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Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 )

3. The learned Commissioner of Income Tax

[CIT(A)] ought to have directed that assessee
was entitled to interest u/s 244A(1)(b) on the
following amounts for the following period:

Amount (Rs.) From To

3188,53,376 28.04.2004 21.12.2006

3. Briefly stated facts are that the assessee is a public sector

undertaking of Ministry of Petroleum and Natural Gas, Govt. of India. It is
engaged in the business of refining of crude oil and marketing of
petroleum products all over India. Originally assessment was framed by
the AO under section 143(3) of the Act vide order dated 27-12-2006 by
making certain disallowance/ rejection of claim of the assessee.
Aggrieved, assessee preferred the appeal before CIT(A), who vide his
order dated 01-06-2011 allowed the deductions in respect to some
issues. Consequent to the appellant order of CIT(A), AO passed the
order giving effect to the order of CIT(A) dated 07-02-2012. The AO
allowed double deduction under chapter VIA and hence committed
mistake. Thereafter, the AO issued notice under section 154 of the Act
dated 19-12-2013 and consequent to this, the AO passed an order under
section 154 of the Act dated 14-05-2013 rectifying the above mistake.
The assessee also filed separate rectification under section 154 of the
Act before the AO on 12-06-2013 as the AO has not granted any interest
under section 244 A (1)(b) on self assessment tax paid, which became
refundable consequent to the order of CIT(A). The assessee claimed that
assessee corporation paid self-assessment tax under section 140A of the
Act amounting to Rs.68 crores for the relevant AY 2004-05 on 28-04-
2004. Pursuant to the order of CIT(A), certain portion of self assessment
tax paid under section 140A of the Act became excess and refundable to
the assessee. Aggrieved, against the non allowance of interest on refund,
the assessee preferred the appeal before CIT(A). The CIT(A) following
the decision of Hon’ble Bombay High Court in the case of Sitaram vs. CIT
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Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 )

(2012) 341 ITR 549 (Bom) allowed the claim of the assessee on excess
payment of self assessment tax from the date of assessment order and
not from the date of payment of self assessment tax by observing in Para
5.1, 5.2.1 and 5.2.2 as under: -

“5.1 I have carefully and dispassionately

considered the facts and circumstances of the case,
written submissions and arguments made by the Ld.
AR before the undersigned. The appellant has
raised solitary ground of appeal involving granting of
interest u/s.244A(1)(b) on delayed refund of self-
assessment tax paid u1s.140A of the Act, which is
decided as under: -

5.2.1 Having considered the rival submissions, it is

noted that the Section 244A(1)(b) of the Act, on
which the appellant has placed reliance, is a specific
provision which deals with interest on refunds "in
any other case". It states that where refund of any
amount becomes due to assessee under the Act, he
is entitled to receive the said amount along with
simple interest thereon. Thus, the provisions of
Section 244A(1)(b) are relevant for this appeal.
Here, the self-assessment tax u/s.140A of the Act of
Rs.68 crores has been admittedly paid by the
appellant on 28th April, 2004. It is, therefore,
obvious that the appellant could have claimed
interest on self-assessment tax and the A.O. is duty-
bound to grant interest u/s.244A(1)(b) of the Act on
refund of excess payment of self-assessment tax
from the date of assessment order and not from the
date of payment of self-assessment tax. Strong
reliance is placed on the following decisions: -

• Sitararn vs. CIT (2012) 341 ITR 549 (Bom)

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Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 )

• (2013) 352 ITR 273 (Delhi)

• India Trade Promotion Organization vs. CIT

(2013) 263 CTR (Del) 18

• Addl. CIT vs. Grindwell Norton Ltd. (2006)

100 lTD 245 (Mumbai)

• Addl. CIT vs. Novartis India Ltd. (ITA No.

5848/Mum/2000)

5.2.2 Having regard to the facts and circumstances

of the case and in view of the above, the A.O. is
directed to grant correct interest u/s.244A(1)(b) of
the Act, as per law, to the appellant after verification
of facts at the time of giving appeal effect.
Accordingly, Ground of appeal No.1 is allowed. NO
other ground of appeal has been raised.”

Aggrieved, against the direction of CIT(A) allowing refund on excess

payment of self assessment tax from the date of assessment order,
Revenue is in appeal before us. The assessee is in cross appeal against
the direction of CIT(A) not allowing the refund on excess payment of self
assessment tax from the date of payment of self assessment tax.

4. At the outset, the learned Counsel for the assessee argued that
this issue is settled by Hon’ble Bombay High Court in the case of Stock
holding corporation vs. NC Tewari [2015] 373 ITR 282 (Bombay) wherein,
after considering the provisions of section 244A (1b) of the Act, the
Hon’ble High Court considered this issue and allowed the claim of the
assessee vide para 12 to 14 as under: -

“12. Similarly, the next contention urged on behalf

of the revenue that the payment of interest should
only be made from the date of notice under Section
156 of the Act is issued to the petitioner in terms of
Explanation to Section 244A(1)(b) of the Act cannot
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ITA No . 42 6 8/ Mu m/ 20 1 6
Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 )

be accepted for two reasons. Firstly, as held by the

Supreme Court in Tata Chemicals Ltd.(supra), the
Explanation would have effect only where payments
of tax have been made pursuant to notice under
Section 156 of the Act. In this case, the payment
has not been made pursuant to any notice of
demand but prior to the filing of the return of income
in accordance with Section 140A of the Act.
Secondly, the provisions of Section 244A(1) (b) very
clearly mandate that the revenue would pay interest
on the amount refunded for the period commencing
from the date the payment of tax is made to the
revenue upto the date when refund is granted to the
revenue. Thus, the submission of Mr. Pinto that the
interest is payable not from the date of payment but
from the date of demand notice under Section 156
of the Act cannot be accepted as otherwise the
legislation would have so provided in Section 244A
1(b) of the Act, rather then having provided from the
date of payment of the tax.

13. We find support for our view from the decisions

rendered by Karnataka High Court in CIT v. Vijaya
Bank [2011] 338 ITR 489/201 Taxman 371/12
taxmann.com 485 and Delhi High Court
in CIT v. Sutlej Industries Ltd. [2010] 325 ITR
331/190 Taxman 136 (Delhi). In both cases in
identical circumstances it was held that interest is
payable from the date of payment of the tax on self-
assessment to the date of refund of the amounts
under Section 244A of the Act.

14. Accordingly, for all the aforesaid reasons, we set

aside the impugned order dated 28 September
1999. We direct the Assessing Officer to compute
the interest payable from the date of payment on
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ITA No . 42 6 8/ Mu m/ 20 1 6
Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 )

self-assessment tax i.e. 31 August 1994 till the date

of refund i.e. 24 October 1998. The revenue is
directed to compute the interest due to the petitioner
and pay the same within six weeks from today.”

5. On this the learned Sr. DR relied on the decision of Hon’ble Delhi

High court in the case of CIT vs. Engineers India Ltd. (2015) 373 ITR 377
(Del) wherein the decision of Hon’ble Bombay High Court was
considered. The learned Counsel for the assessee also relied on the
decision of Hon’ble Calcutta High Court in the case of CIT vs. Birla
Corporation Ltd. in ITA No. 526 of 2004, wherein the issue of refund on
self-assessment tax was granted from the date of making payment till the
date of grant of refund from the date of payment till the date of grant of
refund by observing in final finding as under: -

“U/s. 154 of the Act only a “mistake apparent from

the record” is rectifiable. Thus the precondition to
invoke section 154 is the presence of a mistake and
that the same must be apparent from the record.
The power to rectify a mistake u/s.154, however,
does not extend to revision or review of the order.
The word apparent means something, which is
clearly visible or understood or obvious. Therefore a
mistake which can be rectified u/s.154 is one which
is patent, which is obvious and whose discovery is
not dependent on argument or elaboration. The
rectification of an order does not imply that the
original order is replaced by a completely new order.
In the instant case the assessing officer has
attempted to substitute the original order which is
not permissible u/s.154.

An error, which is by no means self-evident, cannot

be called an apparent error. Nevertheless a mistake
capable of being rectified u/s. 154 is not limited to

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Bharat Petroleum Corporation Ltd. ( A. Y: 2 0 04 - 0 5 )

clerical or arithmetical mistakes only. However it

does not include any mistake which may be
discovered by a complicated process of
investigation, argument or proof. Reference in this
regard may be made to T.S. Balaram, ITO v Volkart
Bros (1971) 82 ITR 40 (SC). A decision on a
debatable point of law or a disputed question of fact
is not a mistake apparent from the record. The
ordinary meaning of the word “apparent” is that it
should be something, which appears to be so ex
facie that it does not admit scope for any argument
or debate. It, therefore, follows that a decision on a
debatable point of law or fact or failure to apply the
law to a set of facts which remains to be
investigated cannot be corrected by way of
rectification. Reference in this regard may be made
to CIT v MMTC Ltd (supra). Section 244A does not
mandate that interest cannot be allowed on self
assessment tax paid u/s 140A. As discussed earlier
it cannot be said that interest u/s.244A can be
allowed only in cases where excess payments of tax
is made consequent to a notice of demand u/s.156.
The language of the Act is clear and there is no
ambiguity in it. Hence the assessee is clearly
entitled to claim interest u/s.244A on refund of
excess self assessment tax.

In K.K.J. Foundations –Vs.- The Assistant Director

of Income Tax (ITA. No. 242 of 2014) the Kerala
High Court by Judgment dated 8th September 2015
held as follows:-

“By invoking the power of rectification, the

ultimate conclusion of a decision cannot be
changed. So also, the employment of the
words phraseologies in Sec.154 shows that
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by rectification it intended only to correct any

mistake and amend the same accordingly. It
is a settled proposition of law that rectification
is a process by which a mistake is set at
right. It thus means correcting an error which
was apparent from record and not deciding
the matter over and again on merits and that
the rectified order does not supersede the
original order but continues with the
incorporated changes. Moreover, we have
come across two judgments of the ‘Hon'ble
Apex Court in 'S. Nagaraj v. State of
Karnataka’ [(1993) Supp. 4 SCC 595] and
'Ammonia Supplies Corporation Pvt. Ltd. v.
Modern Plastic Containers Pvt. Ltd.' [AIR
1998 SC 3153], by which it was held in the
former judgment that rectification of an order
stems from fundamental principle that justice
is above all. It is exercised to remove the
error and not for disturbing finality. In the
latter judgment, it was held that rectification
connotes something what ought to have been
done but by error is not done and what ought
not to have been done was done requiring
rectification. Rectification, in other words, is
the failure to comply with the directions under
the Act. Therefore, it is apposite and clear
that the power under Sec. 154 can be
invoked only to correct an error and not to
disturb a concluded finding.”

Thus in the instant case there was no mistake

apparent from the record which could be rectified
u/s. 154 of the Act. In that view of the matter, the
question Nos.1, 3 and 4 are answered in the

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affirmative. The question No.2 is answered in the

negative.

We therefore direct the assessing officer to compute

the interest payable from the date of payment of tax
on the basis of self-assessment till the date of grant
of refund. The revenue is directed to compute the
interest due to the assessee and pay the same
within a reasonable time.”

6. After hearing both the sides and going through the facts of the case
it is clear that as per the decision of the Hon’ble Bombay High Court in
the case of The Stock Holding Corporation Of India Ltd. (Supra) and
Calcutta High Court in the case of Birla Corporation Limited (supra), we
are of the view that refund u/s 244A(1)(b) of the Act on self assessment
tax is to be paid from the date of payment of self assessment tax till the
date of grant of refund. Respectfully following the Hon’ble Bombay High
Court in the case of The Stock Holding Corporation Of India Ltd. (Supra),
we direct the AO to allow the interest in term of the decision of Hon’ble
Bombay High Court. The appeal of assessee is allowed and that of the
Revenue is dismissed.

7. In the result, the appeal of assessee is allowed and that of the

Revenue is dismissed.
Order pronounced in the open court on 12-07-2017.

Sd/- Sd/-
(RAJESH KUMAR) (MAHAVIR SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 12-07-2017

Sudip Sarkar /Sr.PS

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Copy of the Order forwarded to:

1. The Appellant
2. The Respondent.
3. The CIT (A), Mumbai.
4. CIT
5. DR, ITAT, Mumbai
6. Guard file. //True Copy//
BY ORDER,
Assistant Registrar
ITAT, MUMBAI

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