Intimation issued by AO is appealable where fee is charged for delay in filing of TDS returns

Facts:

a) The issue arising in this appeal was against the intimation issued under section 200A in charging fees payable under section 234E.

b) The CIT(A) held that no appeal was maintainable against the order of AO passed under Section 200A while processing the TDS returns and charging fees under Section 234E. The ITAT held as under:

1) The Legislature recognizes that a deductor who has filed his TDS return, which, in turn, has been processed by the AO and intimation is generated under which, if any amount is found to be payable, then such intimation is also appealable under section 246A since the demand issued by the AO is deemed to be a notice of payment under section 156.

2) Since the intimation issued by the AO was appealable order under section 246A(1)(a) of the Act, therefore, the CIT(A) should have examined the legality of adjustment made under intimation issued under section 200A.- [2016] 74 taxmann.com 6 (Pune - Trib.)

Even refund of excess self-assessment tax paid by assessee would be entitled to interest

Assessee would be entitled to interest under section 244A(1)(b) on amount of refund which was deposited by it by way of self-assessment tax under section 140A

The issue that arose before the High Court was as under:

Whether assessee was entitled to interest on the amount of refund arising due to excess self-assessment tax paid by it?

The Punjab and Haryana High Court held in favour of assessee as under-

1)Section 244A deals with the grant of interest on refund of any amount of tax which becomes due to the assessee in terms of the provisions of Act.

2)Clauses (a) and (b) of sub-section (1) of section 244A deal with two different situations. Clause (a) deals with refund of taxes which have been paid under section 115WJ or collected at source under section 206C or paid by way of advance tax or treated as paid under section 199. Clause (b) deals with refund of taxes in any other case.

3)It was clear that assessee’s case would not fall under clause (a) of section 244. However, revenue contends that cause (b) is confined to situations where the tax refund has been paid in terms of a notice of demand issued by the Assessing Officer under section 156.

4)It was held that once self-assessment tax so paid gets adjusted against the tax determined by the Assessing Officer upon assessment, it takes the imprint of a tax paid in pursuance notice of demand issued under section 156.

5)Section 244A was inserted in the statute as a measure of rationalization to ensure that the assessee is duly compensated by the Government, by way of payment of interest for monies legitimately belonging to the assessee and wrongfully retained by the Government.

6)The tax deducted at source, advance tax and also tax paid by way of self-assessment, after its adjustment in the tax liability of the assessee loses its original character and becomes tax paid in pursuance of the liability. Therefore, assessee was entitled to interest under section 244A(1)(b) on excess self-assessment tax paid by it- CIT V. PUNJAB CHEMICAL & CROP PROTECTION LTD. [2015] 57 taxmann.com 283 (Punjab & Haryana)

Editor’s Note:

Even after this verdict this issue is not resolved as judiciary differs on this issue. The Delhi High Court in the case of CIT v. Engineers India Ltd.[2015] 55 taxmann.com 1 (Delhi)denied to grant interest on excess self-assessment tax paid by assessee.