RIYAZ S. PADVEKAR, J.M.: ORDER Revenue has filed these six appeals challenging impugned orders of CIT(A)-I, Trivandrum for asst. yrs. 1989-90, 1990-91, 1991-92, 1995- 9 6 , 1997-98 and 2001-02. issues arising for our consideration in these appeals are common, hence, these appeals were heard together and now being disposed of by this common order for sake of convenience. 2. first issue which arises for our consideration and which is common in all appeals is whether assessee is entitled under s. 244A of Act interest on due interest on refund if there is delay in giving refund to assessee. 3. We have heard learned senior Departmental Representative Shri V. Sreekumar for Revenue and learned Authorised Representatives Shri K. Srinivasan and Shri C. Naresh for assessee. learned Departmental Representative submitted that CIT(A) erred in directing AO to grant interest on entire amount that became refundable to assessee without making any distinction between tax and interest component of refund. It was further submitted that legislature has envisaged payment of interest on excess tax collected/deducted at source, advance tax payment and other payment and that payment of tax already made is prerequisite for granting interest on excess payment. He further argued that in case of Kurumber Betta Estate vs. ITO (2002) 176 CTR (Ker) 426 : (2002) 257 ITR 328 (Ker), jurisdictional High Court has given clear finding that s. 244A would come into action only in event of excess amount of tax, penalty, TCS or paid as advance tax, or treated as paid under s. 199. liability of Revenue to pay interest under s. 244A is only towards excess amount of tax or penalty, demanded or collected by it in discharge of liability of assessee. He further submitted that in case of Kurumber Betta Estate (supra), Hon ble High Court has held that in tax jurisprudence, there is no concept of equity and hence, Revenue cannot be directed to pay interest in equity when there is no clear provision under income-tax. He further submitted that if intention of legislature was to provide interest on interest then it would not have used expression "simple interest" in s. 244A nor would it have omitted interest from purview of cl. (b) of sub-s. (1) of s. 244A and said clause only refers to tax and interest and laid down manner for computation of interest under s. 244A. Hence, he submitted that CIT(A) was not at all justified in directing AO to grant interest on interest due on amount of tax to be refunded. learned Departmental Representative relied on following precedents : (i) Sandvik Asia Ltd. vs. CIT (2004) 189 CTR (Bom) 226 : (2004) 267 ITR 78 (Bom); (ii) Kurumber Betta Estate (supra). 4 . On other hand, learned Authorised Representative submitted that as far as case of assessee bank is concerned, s. 244A is applicable as said section was brought on statute book from asst. yr. 1989-90. He further submitted that there is change in wording in s. 244A and legislature has used words "refund of any amount becomes due to assessee" and in s. 244 words used were "a refund is due to assessee". He further submitted that s. 240 is not applicable to assessee on facts. Moreover, in s. 244A, legislature has not given reference of s. 240 which was earlier there in s. 244 which ceased to apply from asst. yr. 1989-90. He, therefore, submitted that "any amount due" includes interest unauthorisedly withheld by Department which otherwise assessee is eligible to get as per provisions of law within time-limit framed and assessee can use that money. Interest due on amount of tax refundable is also refund within meaning of s. 244A and CIT(A) has rightly granted same. learned Authorised Representative further submitted that decision of Bombay High Court in case of Sandvik Asia Ltd. (supra) has been reversed by Supreme Court vide judgment dt. 27th Jan., 2006 and in said judgment, Supreme Court has held that if there is delay in getting refund then assessee is entitled to interest on interest due on amount of tax. He further submitted that in case of Sandvik Asia Ltd. (supra), Supreme Court has examined provisions of ss. 214, 237 and 244, but words used in s. 244A are much more wider than words used in s. 244. He, therefore, submitted that CIT(A) has rightly directed AO to work out interest on amount of tax as well as interest and grant same to assessee. learned Authorised Representative relied on following precedents : (i) Sandvik Asia Ltd. vs. CIT (2006) 200 CTR (SC) 505 : (2006) 280 ITR 643 (SC); (ii) CIT vs. Narendra Doshi (2002) 174 CTR (SC) 411 : (2002) 254 ITR 606 (SC); (iii) D.J. Works vs. Dy. CIT (1992) 102 CTR (Guj) 2 : (1992) 195 ITR 227 (Guj). 5 . We have heard rival submissions of parties. We have also carefully considered facts relating to this issue as per material placed before us. We have also considered written submissions filed by learned Departmental Representative as well as learned Authorised Representative. In this case, it is not disputed that for all assessment years in question, s. 244A is applicable. CBDT has explained scope and effect of s. 244A in Circular No. 549, dt. 31st Oct., 1989 [(1990) 82 CTR (St) 1] as under : "Payment of interest by Department for delay in grant of refund due to assessee : 11.1 old provisions regarding payment of interest by Department old provisions in IT Act, which provided for payment of interest by Department on refunds due to assessee, were contained in following sections of Act. (i) Sec. 214, relating to payment of interest to assessee on excess amount paid as advance tax. (ii) Sec. 243, relating to payment of interest to assessee for delay in granting refund after claim for refund was made or after refund was determined. (iii) Sec. 244, relating to payment of interest to assessee for delay in granting refund as result of appeal, etc. 11.2 insertion of new s. 244A in lieu of ss. 214, 243 and 244 Under provisions of s. 214, interest was payable to assessee on any excess advance tax paid by him in financial year from 1st day of April next following said financial year to date of regular assessment. In case refund was not granted within three months from end of month in which regular assessment was completed, s. 243 provided for further payment of interest. Under s. 244, interest was payable to assessee for delay in payment of refund as result of order passed in appeal, etc. from date following after expiry of three months from end of month in which such order was passed to date on which refund was granted. rate of interest under all three sections was 15 per cent per annum. 11.3. These provisions, apart from being complicated, left certain gaps for which interest was not paid by Department to assessee for money remaining with Government. To remove this inequity, as also to simplify provisions in this regard, amending Act, 1987, has inserted new s. 244A in IT Act, applicable from asst. yr. 1989-90 and onwards, which contains all provisions for payment of interest by Department for delay in grant of refunds. rate of interest has been increased from earlier 15 per cent per annum to 1.5 per cent per month or part of month comprised in period of delay in grant of refund. Amending Act, 1987, has also amended ss. 214, 243 and 244 to provide that provisions of these sections shall not apply to asst. yr. 1989-90 or any subsequent assessment years." 6. Sec. 244A which is brought on statute book w.e.f. asst. yr. 1989-90 reads as under : "244A. (1) Where refund of any amount becomes due to assessee under this Act, he shall, subject to provisions of this section, be entitled to receive, in addition to said amount, simple interest thereon calculated in following manner, namely : (a) where refund is out of any TCS under s. 206C or paid by way of advance tax or treated as paid under s. 199, during financial year immediately preceding assessment year, such interest shall be calculated @ one and one-half per cent for every month or part of month comprised in period from 1st day of April of assessment year to date on which refund is granted : Provided that no interest shall be payable if amount of refund is less than ten per cent of tax as determined under sub-s. (1) of s. 143 or on regular assessment; (b) in any other case, such interest shall be calculated at rate of one and one-half per cent for every month or part of month comprised in period or periods from date or, as case may be, dates of payment of tax or penalty to date on which refund is granted. Explanation For purposes of this clause, date of payment of tax or penalty means date on and from which amount of tax or penalty specified in notice of demand issued under s. 156 is paid in excess of such demand. (2) If proceedings resulting in refund are delayed for reasons attributable to assessee, whether wholly or in part, period of delay so attributable to him shall be excluded from period for which interest is payable, and where any question arises as to period to be excluded, it shall be decided by Chief CIT or CIT whose decision thereon shall be final. (3) Where, as result of order under sub-s. (3) of s. 143 or s. 144 or s. 147 or s. 154 or s. 155 or s. 250 or s. 254 or s. 260 or s. 262 or s. 263 or s. 264 or order of Settlement Commission under sub-s. (4) of s. 245D, amount on which interest was payable under sub-s. (1) has been increased or reduced, as case may be, interest shall be increased or reduced accordingly, and in case where interest is reduced, AO shall serve on assessee notice of demand in prescribed form specifying amount of excess interest paid and requiring him to pay such amount; and such notice of demand shall be deemed to be notice under s. 156 and provisions of this Act shall apply accordingly. (4) provisions of this section shall apply in respect of assessments for assessment year commencing on 1st day of April, 1989, and subsequent assessment years." Earlier, provisions for granting interest on amount refundable to assessee were contained in ss. 240, 243 and 244 of Act. As ss. 240 and 244 have ceased to apply from asst. yr. 1989-90, it is not necessary for examining provisions of said section, but some discussion may be required for interpreting issue in light of provisions of s. 244A. 7 . decision in case of Narendra Doshi (supra) had approved legal principles laid down by Gujarat High Court in cases of D.J. Works (supra) and Chimanlal S. Patel vs. CIT (1994) 119 CTR (Guj) 293 : (1994) 210 ITR 419 (Guj) as Revenue has not challenged decision of Gujarat High Court in respect of payment of interest on interest due to assessee. Now, in recent judgment in case of Sandvik Asia Ltd. (supra) wherein asst yrs. 1977-78, 1978-79, 1981-82 and 1982-83 are involved, Hon ble Supreme Court has examined provisions of ss. 214, 237, 240, 243, 244 and relevant case law on issue and held as under : "In view of express provisions of IT Act, 1961, assessee is entitled to compensation by way of interest for delay in payment of amounts lawfully due to assessee which are withheld wrongly and contrary to law. Government is liable to pay interest, at rate applicable to excess amount refunded to assessee, on interest amount which becomes due under s. 214(1). Sec. 214(1) itself recognizes in principle liability to pay interest on amount of tax paid in excess of amount of assessed tax and which is retained by Government. Interest on excess amount is payable at rate specified therein from first day of year of assessment to date of regular assessment. Once interest becomes due, it takes same colour as excess amount of tax which is refundable on regular assessment. Supreme Court in Modi Industries Ltd. etc. etc. (1995) 128 CTR (SC) 361 : (1995) 216 ITR 759 (SC) has clarified that advance tax has to be treated as paid pursuant to order of assessment and hence interest is payable thereon but under s. 244. Interest is payable on amount to be refunded under s. 244(1) within three months from decision of appellate or other authority specified in s. 240. expression amount in earlier part of s. 244(1A) refers not only to tax but also to interest; it is neutral expression and it cannot be limited to tax paid in pursuance of order of assessment. Even assuming that there is no provision for payment of compensation, compensation for delay is required to be paid as Act itself recognizes in principle liability of Department to pay interest when excess tax was retained and same principle should be extended to cases where interest was retained. CIT vs. Narendra Doshi s (2002) 174 CTR (SC) 411 : (2002) 254 ITR 606 (SC) was clearly decision on merits albeit proceeding on assumption that there was no provision in Act granting interest on unpaid interest. There is no question of delay being justifiable , and even if Revenue takes erroneous view of law, that cannot mean that withholding of monies is justifiable or not wrongful . There is no exception to principle for allegedly justifiable withholding. When claims of authority are found to be unsustainable or erroneous by Courts it follows that authority has acted wrongfully in sense of not in accordance with law and compensation to party deprived must follow : Sec. 240 which was inserted by Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April, 1989, will not apply to assessment years prior to that date. Sec. 240 clearly lays down that what is relevant is whether any amount has become due to assessee, and further that phrase "any amount" will also encompass interest. For asst. yr. 1977-78 for which assessee had paid advance tax, assessee was granted refund of tax on basis of assessment order and was asked to pay additional tax after rectification. CIT(A) gave substantial relief and assessee received refund only of excess amount paid as advance tax. assessee was not granted interest on amounts refundable. For asst. yr. 1978-79, assessee was granted refund of tax on basis of assessment order but no interest was paid on refund. After CIT(A) gave substantial relief assessee received refund only of excess amount paid as advance tax. But no interest was granted. For asst. yr. 1981-82 assessee was granted refund as well as interest on amount under s. 214. After CIT(A) granted substantial relief assessee was allowed interest only under s. 214 but no interest was granted under ss. 214(1A) and 244(1A). For asst. yr. 1982-83, assessee paid further tax on assessment; but CIT(A) gave substantial relief and assessee received refund of excess tax paid but no interest was granted under s. 214 or s. 244. Pursuant to order of Supreme Court, Department granted interest upto 27th March, 1998 but Department refused interest on interest. assessee filed writ petitions in High Court challenging orders; but High Court dismissed petitions. On appeal to Supreme Court : Held accordingly, reversing decision of High Court, that assessee was entitled to interest on amounts of interest paid under s. 214 and/or s. 244, and that Department was bound to grant interest which had accrued for those periods. But since counsel for assessee conceded that interest on interest should be paid from 31st March, 1986 to 27th March, 1998, Supreme Court granted interest for this period by way of compensation, which was to be at nine per cent." 8 . As far as provisions of s. 244A are concerned, legislature has used words "where refund of any amount becomes due to assessee under this Act". It means that refund does not only consist of "tax" refundable to assessee, but also interest due on said "tax" which has become payable by virtue of provisions of this Act to assessee and which is not paid and there is delay in payment of said interest that will constitute refund. Act has conferred right on assessee to claim interest on amount of "tax" which is refundable to him which is paid in excess of demand and statute has also prescribed time-limit for payment of tax as well as interest due on said tax. In our opinion, term "refund" used in s. 244A interest due on said tax. In our opinion, term "refund" used in s. 244A comprised of element of "tax" and also "interest due" on that particular amount of tax which has been delayed by Department. It is true that in cases of Sandvik Asia Ltd. (supra), Narendra Doshi (supra), D.J. Works (supra), old ss. 214, 243, 244 were under consideration, but it makes no difference for applying principles laid down in said decision to s. 244A as it is substituted for ss. 214, 243 and 244. After considering language used by legislature in s. 244A, legislature has enlarged provision by giving clear benefits to assessee. We, are therefore, of opinion that principles applicable to earlier provisions; in respect of payment of interest by Department on delayed amount of tax refundable and interest due thereon are also applicable to s. 244A of Act. 9. learned Departmental Representative has relied on decision of jurisdictional High Court in case of Kurumber Betta Estate (supra). In said decision, Hon ble High Court has relied on judgment of Supreme Court in case of Modi Industries Ltd. etc. etc. vs. CIT (1995) 128 CTR (SC) 361 : (1995) 216 ITR 759 (SC) and observed that it is accepted proposition in tax jurisprudence that tax laws know no equity. There cannot be direction to Revenue to pay interest in equity, when there is no such provision in IT Act. decision in case of Modi Industries Ltd. (supra) has been considered by Hon ble Supreme Court in recent decision in case of Sandvik Asia Ltd. (supra) and has observed as under : "The High Court in its judgment has referred to provisions of s. 244(1A) and decision of this Court in Modi Industries Ltd. etc. etc. vs. CIT (1995) 128 CTR (SC) 361 : (1995) 216 ITR 759 (SC) extracted two paras from this Court s judgment holding that there can be no question of paying interest under both ss. 214(1A) and 244(1A) of Act simultaneously, and further that there is no right to receive interest except as provided by statute. decision in Modi Industries Ltd s case (supra) has no bearing whatsoever on issue in hand as issue in that case was correct meaning of phrase regular assessment and as consequence under which provision assessee was entitled to interest for period upto date of regular assessment and thereafter. matter of what was due to it in terms of decision in Modi Industries Ltd s case (supra) is over, concluded, no longer in dispute and was agreed/accepted on 27th March, 1998 when second respondent gave effect to previous order of this Court dt. 30th April, 1997. working of respondents itself conclusively shows, further interest received is admittedly in accordance with Act. decision in Modi Industries Ltd s case (supra), in our view, has no bearing whatsoever on matter in hand. main issue now is whether assessee is entitled to be compensated by Revenue for delay in paying to assessee s amounts admitted due to it ?" 10. We find that in case of Kurumber Betta Estate (supra), decision of Supreme Court in case of Narendra Doshi (supra) was not brought to notice of jurisdictional High Court which is, in our opinion, directly on issue before us. Further, decision in case of Narendra Doshi (supra) is by larger Bench of Supreme Court. We, therefore, respectfully following principles laid down by Hon ble Supreme Court in case of Narendra Doshi (supra) and recent decision of Supreme Court in case of Sandvik Asia Ltd. (supra), hold that CIT(A) has rightly directed AO to pay interest to assessee on amount of interest on tax refundable which was delayed by Department. We find no infirmity in order of CIT(A). We, therefore, confirm order of CIT(A) on this issue. 11. next issue is whether order refusing to grant interest to assessee is appealable or not. This issue arises in ITA Nos. 1187, 1189 and 1191/Coch/2004 relevant to asst. yrs. 1991-92, 1997-98 and 2001-02, respectively. 1 2 . We have heard rival submissions of learned Departmental Representative and learned Authorised Representative. learned Departmental Representative has filed written submissions and also relied on following precedents : (i) CIT vs. H.M. Mirchandani (1986) 55 CTR (Kar) 415 : (1986) 161 ITR 800 (Kar); (ii) Central Provinces Manganese Ore Co. Ltd. vs. CIT (1986) 58 CTR (SC) 112 : (1986) 160 ITR 961 (SC); (iii) Tamil Nadu Speedline Agencies 114 SCC 359 (Mad). 13. On other hand, learned Authorised Representative relied on recent decision of Gujarat High Court in case of CIT vs. Industrial Machinery Mfg. (P) Ltd. (2006) 202 CTR (Guj) 83 : (2006) 282 ITR 595 (Guj). 14. We have considered facts of case as per record placed before us. We have also given due consideration to legal principles laid down in precedents relied on by learned Departmental Representative. We find that facts in precedents relied on by learned Departmental Representative are distinguishable and hence as far as facts of present issue are concerned, legal principles in precedents are not applicable. As far as precedent relied on by learned Authorised Representative is concerned, we find that facts in said precedent are identical to facts of assessee s cases and hence, said precedents is applicable to assessee s case for following reasons : As far as asst. yr. 1991-92 is concerned, assessee challenged order passed by AO under s. 154 of Act which revised refund of assessee. orders which can be challenged before CIT(A) have been given in s. 246A of Act which is brought on statute book by Finance Act (No. 2) of 1998 w.e.f. 1st Oct., 1998. cl. (c) of s. 246A(1) provides that assessee can challenge order made under s. 154 wherein refund is reduced. As we have already held that interest is part of refund and as interest was denied to assessee, it is reduction in refund due to assessee, hence we find no substance in argument of Revenue challenging order of CIT(A) taking this ground for asst. yr. 1991-92. As far as other two assessment years i.e. asst. yrs. 1997-98 and 2001-02 are concerned, assessee challenged orders of AO giving effect to order of CIT(A). This issue is also covered in favour of assessee in case of CIT vs. Industrial Machinery Mfg. (P) Ltd. (supra) wherein it has been held as under : "In relation to question No. 1, if question is read de hors facts of case then same would become academic. As can be seen from provisions of s. 246(1)(f) of Act it is apparent that any order under s. 154 of Act which has effect of enhancing assessment or reducing refund or order refusing to allow claim made by assessee is appealable order before AAC. Under s. 246(2)(a) by process of incorporation said provision, viz. s. 246(1)(f) of Act finds mention and, hence, same is also appealable before CIT(A). Therefore, question is required to be answered in affirmative. However, in facts of present case, AO has merely titled order as order giving effect to Tribunal s order . said order has not been termed to be order under s. 154 of Act, but CIT(A) has read same as being order under s. 154 of Act. However, CIT(A) has not non- suited assessee on said count. As noticed hereinbefore CIT(A) has held that order refusing to grant interest under s. 214 of Act is not appealable. Tribunal has proceeded on footing that even if it is order under s. 154 of Act it is appealable order. It is settled position in law that order giving effect to appellate order bears same characteristic as original order against which appeal was filed, viz., in this case, assessment order, and it is accepted fact that assessment order is appealable order. appeal is nothing else but continuation of original proceedings and hence, order passed to give effect to findings of appellate authority cannot be different in nature. Therefore also, Tribunal was justified in holding that order refusing to grant interest under s. 214 of Act was appealable order and CIT(A) was not justified in not entertaining appeal..." We, therefore, hold that CIT(A) has rightly entertained and decided appeals filed by assessee. 15. In result, all appeals of Revenue stand dismissed. *** DEPUTY COMMISSIONER OF INCOME TAX v. STATE BANK OF TRAVANCORE