ORDER
Per R.S. Syal, A.M.
These two appeals by the assessed relate to the assessment years 1994-95 & 1995-96. Since both the appeals rotate around common issue, we are thereforee proceeding to dispose them of by a consolidated order for the sake of convenience.
Assessment year 1994-95
2. The solitary effective ground projects the grievance of the assessed as under :
'The Commissioner (Appeals) erred on the facts of the case and in law in not allowing interest under section 244A/other relevant provisions of the Income Tax Act on the amount of self-assessment tax paid, which became refundable under section 143(3)1/250 as per provisions of Income Tax Act from the date of payment of such tax.'
3. Briefly stated the facts of the case are that the assessed became entitled to substantial refund on account of the appellate order. Refund also included certain amounts which had been paid as self-assessment tax. At the time of giving effect to the appellate order, the learned assessing officer granted the interest on the refund of self-assessment tax from 1-4-1997 to June 1997 because the assessment was finalized in March 1997. The assessed claimed that the interest on self-assessment tax should have been granted from 20-11-1994 being the date of payment of self-assessment tax to June 1997. When the matter travelled to the first appellate authority he observed that the case was covered within section 244A(1)(b) because clause (a) of this section only referred to the refunds arising out of advance tax, TDS and tax collected at source. While talking note of Explanationn below clause (b) it was opined that the self-assessment tax was not covered within the meaning of section 244A(1)(b) and only the post-assessment demand was to be considered for this purpose. Accordingly the action of the assessing officer was confirmed by holding that the refund on account of self-assessment tax will not be eligible for interest under section 244A.
4. Before us the learned counsel for the assessed opened his arguments by stating that his case was covered under clause (b) of section 244A(1). Referring to circular No. 549 dated 30-10-1987 at (1990) 182 ITR 48, it was submitted that the spirit behind the insertion of section 244A was to allow interest on all the amounts paid by the assessed and the ambiguities existing in the earlier analogous sections were removed. While referring to the case of Hooghly Mills Co. Ltd. v. Dy. CIT (2000) 74 ITD 309 (Cal), it was stated that the assessed would be entitled to interest on refund of excess payment of self-assessment tax along with the tax deducted at source. A further contention was raised that there were several decisions which entitle the assessed even to interest on interest. The case law in CIT v. Narinder Doshi (2002) 254 ITR 646 and CIT v. Goodyear India Ltd. : [2001]249ITR527(Delhi) were cited in support of this proposition. A further contention was raised on behalf of the assessed that the main clause (b) to this section entitles assessed to interest from the date of payment of tax to the date on which the refund is actually granted. It was stated that the Explanationn could in no way curtail the benefit granted by the substantive section. Relying on the decision of Hon'ble Supreme Court in the case of S. Sundaram Pillai v. V.R. Pattabiraman : [1985]2SCR643 it was stated that the Explanationn cannot take away a statutory right with which any person under statute has been clothed. It was stated that the said decision of the Hon'ble Supreme Court was considered in Weld Craft (P) Ltd. v. ITO (1990) 36 TTJ (Ctk) 169. it was thereforee urged that the decision of the first appellate authority was in violation of the precedent of the Hon'ble Supreme Court and other cases and hence his order should be reversed. The learned counsel also relied in the case of CIT v. Ashok Leyland Ltd. : [2001]252ITR542(Mad) to contend that the interest on self-assessment tax was also liable to be granted.
5. In the opposition the learned Departmental Representative strongly supported the order passed by the first appellate authority. It was stated that similar issue was considered in the case of Dhanvi Trading & Investment (P) Ltd. v. Assessing Officer wherein the Tribunal held that the assessed would be entitled to interest on the self-assessment tax from the date of the assessment order, as was done in the instant case. Reliance was also placed on the decision of the Hon'ble Supreme Court in the case of Modi Industries Ltd. v. CIT : [1995]216ITR759(SC) in support of the impugned order.
6. In the rejoinder the learned counsel for the assessed contended that the decision of the Hon'ble Supreme Court in Modi Industries Ltd.'s case (supra) had at no stage laid down that no interest would be allowed on self-assessment tax.
7. We have considered the rival submissions in the light of material placed before us and precedents relied upon. The short question in the present appeal calling for adjudication is as to whether the assessed is entitled to interest on the self-assessment tax from the date of payment of such tax. It is the common ground of both the sides that clause (a) of section 244A(I) is not applicable to the facts of the present case and the relevant applicable clause is (b). It would be relevant at this stage to extract the provisions of section 244A(1)(b) as under :
(b) in any other case, such interest shall be calculated at the rate of (two third per cent) for every month or part of a month comprised in the period or periods from the date or, as the case may be, date of payment of the tax or penalty to the date on which the relevant is granted.
Explanation : For the purpose of this clause, 'date of payment of tax or penalty' means the date on and from which the amount of tax or penalty specified in the notice of demand issue under section 156 is paid in excess of such demand.
8. In so far as the refund arising out of the advance tax, TDS and tax collected at source is concerned, clause (a) provides that the period of interest shall start from the first date of April of the assessment year. Coming to clause (b), which is admittedly relevant for our purpose, it is seen that the interest starts from the date of payment of tax or penalty. The Explanationn explains the meaning of the expression 'date of payment of tax or penalty' which is relevant for the purposes of this clause. It shows that an artificial meaning has been assigned to the expression 'date of payment of tax or penalty' which is confined to clause (b) alone. The meaning of this expression for the purposes of this clause has been stated to be the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand. Section 156, in turn, states that where any tax etc. is payable in, consequence of an order passed under this Act, the assessing officer shall serve upon the assessed a notice of demand in the prescribed form specifying the same as payable. A conjoint reading of these two sections clearly demonstrates that the reference to the tax paid under this clause is only to the post-assessment tax which is payable in consequence of the order passed after adjustment of taxes already paid. Self-assessment tax does not appear anywhere in the notice of demand. Form No. 7 read with rule 15 of the Income Tax Rules, 1962 clearly shows that the notice of demand is issued for a particular assessment year demanding a particular sum determined to be payable by the assessed. In view of the exclusive definition to the expression 'date of payment of tax or penalty' for the purpose of clause (b) of section 244A(1) it becomes abundantly clear that the self-assessment tax is not contemplated to be covered under this clause and only the refund arising out of the payments made on account of post-assessment taxes are included in its scope. Had the intention of the legislature been to allow interest on self-assessment tax from the date of its payment or from the first day of the April of the relevant assessment year, then either there would have been a specific mention to this effect or covered it in clause (a). We appreciate the contention made on behalf of the assessed that though the amount of self-assessment tax remains with the department from the date of its payment but not granting interest on it from that date till the date of the completion of assessment deprives the assessed from its legitimate right. At the same time we are conscious of the fact that the equity or hardship is hardly relevant in the interpretation of a tax law. The highest court of the land has reiterated this principle on several occasions. Recently in Hemlatha Gargya v. CIT it has been laid down that there is no equity about tax. To the similar effect is another judgment in the case of Karamchari Union, Agra v. Union of India : (2000)IILLJ603SC .
9. Now we will, deal with the contention raised by the learned counsel with regard to the role of an Explanationn as considered by the Hon'ble Supreme Court in S. Sundaram Pillai's case (supra). There is no dispute about the fact that in this decision it was clearly laid down that an Explanationn cannot take away a statutory right which is conferred under the provisions of a statute. We find that the ratio of this decision is not applicable to the facts of the present case for the ostensible reason that the right to interest under section 244A emanates from this section itself. No doubt clause (b) refers to the calculation of interest from the date of payment of tax or penalty but what is contemplated as the 'date of payment of tax or penalty' has been elaborated further by the statute by insertion of the Explanationn to this section which contains an exclusive definition of this expression which is relevant only for this clause. The benefit conferred by clause (b) is not an absolute benefit. We find that the Explanationn in this section is merely explaining the meaning of an expression which in no way is curtailing the scope of the main section. When a particular meaning is assigned to an expression used in the section, it would be wholly unfair and unjustified in not considering that meaning and reading the section in isolation divorced from the Explanationn. If we were to accept the contention of the learned authorised representative then it would result in erasing the provisions of Explanationn from the statute, which in effect is a part and parcel of this clause and is explaining the circumstances and the period for which the interest is to be computed. In the light of these facts we find that the case relied upon by the learned authorised representative in this regard is distinguishable.
10. The decision relied upon by the learned authorised representative in Ashok Leyland Ltd.'s case (supra) is also not helping the case of the assessed in so far as that was rendered in the context of section 243 and the assessed was held to be entitled to interest on self-assessment tax in terms of section 243. When we scrutinize the provisions of section 243 it comes out that the interest on delayed refunds has to be granted but the starting date for such interest runs from the end of the month in which the total income is determined or when the claim for the refund is made. It would be relevant to mention at this juncture that the provisions of section 243 are not relevant for any assessment year commencing from 1-4-1989 or thereafter and the assessment year under consideration is 1994-95. Be that as it may, it is found that there is no dispute that the income in the instant case was determined in the month of March 1997 at the time of passing of the assessment order and the assessing officer in his own wisdom granted interest from 1-4-1997 onwards.
11. The other decision relied upon by the learned authorised representative is the case of Hooghly Mills Co. Ltd. (supra), also does not advance his case any further for the reason that the subject matter of dispute in that case was entirely different. Though in that case it was held that the assessed would be entitled to interest under section 244A(1) on refund of excess payment of self-assessment tax along with the tax deducted at source, it nowhere laid down that the starting point for the grant of interest on the self-assessment tax would be the date on which such self -assessment tax was paid, which is the issue under consideration. On the contrary the decision cited by the learned Departmental Representative in Dhanvi Trading & Investment (P) Ltd. case (supra) is a direct authority on the issue under dispute in which relying upon the provisions of section 140A(2), it was held that the assessed would be entitled to interest on the self-assessment tax from the date of the assessment order and not from the date of payment of self-assessment tax. We find that the order of the Commissioner (Appeals) is in conformity with this order. We do not propose to deal with the other decision relied upon by both the sides for the reason that they are not germane to the issue and operate in different fields. In the light of these facts and legal position discussed above we do not find any cause of grievance for the assessed in the order of the Commissioner (Appeals) warranting any interference.
12. In the result the appeal for this year stands dismissed.
Assessment year: 1995-96
13. The only effective ground raised by the assessed in this appeal reads as under:
'The Commissioner (Appeals) erred on the facts of the case and in law in not allowing interest under section 244A/other relevant provisions of the Income Tax Act on the amount of self-assessment tax paid, which became refundable under section 143(1)(a)/143(1B) as per provisions of Income Tax Act from the date of payment of such tax.'
14. The facts of this year are similar to those for assessment year 1994-95 as discussed above with the only distinction that in this year the return was processed under section 143(1)(a) unlike in the assessment year 1994-95 when the assessment was made under section 143(3). Both the sides are agreeable that the decision in the assessment year 1994-95 will be fully applicable to this year as well because making of assessment under section 143(3) and issuing of intimation under section 143(1)(a) would not alter the situation in so far as the granting of interest under section 244A is concerned. Following our view in the foregoing paras we uphold the order of the Commissioner (Appeals) in this year also.
15. In the result this appeal also stands dismissed.