Sri Sarvaraya Sugars Ltd. v. Asst. Commissioner of Income-tax Circle-1, Kakinada
[Citation -2019-LL-0906-4]

Citation 2019-LL-0906-4
Appellant Name Sri Sarvaraya Sugars Ltd.
Respondent Name Asst. Commissioner of Income-tax Circle-1, Kakinada
Court ITAT-Visakhapatnam
Relevant Act Income-tax
Date of Order 06/09/2019
Assessment Year 2000-01
Judgment View Judgment
Keyword Tags rectification of mistake • revenue expenditure • interest on refund • disallowance of interest on refund • capitalization of interest • lease rental
Bot Summary: Against the order of the AO, the assessee went on appeal before the CIT(A) and the matter travelled to the ITAT. The ITAT set aside the assessment order with a direction to the AO to redo the assessment. The AO given effect to the consequential order and passed order u/s 143(3) r.w.s. 254 of the Act on 27.06.2008 determining total income at Rs.8,24,33,339/- and also determined the refund at Rs.1,33,22,206/- but did not grant the interest on refund. The assessee filed the petition before the AO requesting for grant of interest vide letter dated 10.07.2012 and the AO rejected the assessee s request vide letter dated vide 08.08.2012 stating that no refund is allowable on taxes paid under MAT and self assessment tax. Against the order of AO rejecting the assessee s request for grant of interest on refund, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) dismissed the appeal of the assessee as infructuous. Since there is no prescribed proforma for application u/s 154, the application filed by the assessee requesting for grant of interest on refund tantamounts to petition u/s 154 and accordingly, the order given by the AO vide letter dated 08.08.2012 is an order u/s 154 requested to treat the order dated 08.08.2012 of the AO as 154 order and adjudicated the issue on merits. In the instant case, though the AO has given effect to the order of this Tribunal and determined the refund, no interest was granted to the assessee and no reason was given in the order for not granting the interest on refund determined by the AO. Thus, there was a mistake in the order of the AO application filed by the assessee dated 10.07.2012 required to be treated as application u/s 154 for rectification of mistake and the letter of the AO dated 08.08.2012 partakes the character of order u/s 154. We remit the matter back to the file of the Ld.CIT(A) with a direction to treat the letter dated 08.08.2012 as order u/s 154 and decide the issue on 5 I.T.A. No.413/Viz/2018, A.Y.2000-01 M/s Sri Sarvaraya Sugars Ltd., Chelluru merits after giving opportunity to the assessee.


IN INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.No.413/Viz/2018 (Assessment Year : 2000-01) M/s Sri Sarvaraya Sugars Ltd. Vs. Asst.Commissioner of Chelluru Income Tax Rayavaram Mandal Circle-1 East Godavari Dist. Kakinada [PAN : AAECS6554N] (Appellant) (Respondent) Appellant by : Shri G.V.N.Hari, AR Respondent by : Shri V.Appala Raju, DR Date of Hearing : 14.08.2019 Date of Pronouncement : 06 .09.2019 ORDER Per Shri D.S.Sunder Singh, Accountant Member : This appeal is filed by assessee against order of Commissioner of Income Tax (Appeals) [CIT(A)]-9, Hyderabad vide I.T.A.No.10432/ACIT-1, Kakinada/2017-18 dated 21.06.2018 for Assessment Year (A.Y.) 2000-01. 2 I.T.A. No.413/Viz/2018, A.Y.2000-01 M/s Sri Sarvaraya Sugars Ltd., Chelluru 2. All grounds of appeal are related to grant of interest u/s 244A of Income Tax Act, 1961 (in short Act ) on refund determined by Assessing Officer (AO). Brief facts of case are that in this case, assessment was originally completed u/s 143(3) by order dated 26.03.2002 on total income of Rs.8,98,30,172/- against returned income of Rs.7,22,96,580/-. AO made additions relating to lease rentals of Rs.71,24,386/- and capitalized interest which was claimed as revenue expenditure for amount of Rs.1,04,09,206/-. 3. Against order of AO, assessee went on appeal before CIT(A) and matter travelled to ITAT. ITAT set aside assessment order with direction to AO to redo assessment. AO given effect to consequential order and passed order u/s 143(3) r.w.s. 254 of Act on 27.06.2008 determining total income at Rs.8,24,33,339/- and also determined refund at Rs.1,33,22,206/- but did not grant interest on refund. assessee filed petition before AO requesting for grant of interest vide letter dated 10.07.2012 and AO rejected assessee s request vide letter dated vide 08.08.2012 stating that no refund is allowable on taxes paid under MAT and self assessment tax. 3 I.T.A. No.413/Viz/2018, A.Y.2000-01 M/s Sri Sarvaraya Sugars Ltd., Chelluru 4. Against order of AO rejecting assessee s request for grant of interest on refund, assessee went on appeal before CIT(A) and Ld.CIT(A) dismissed appeal of assessee as infructuous. Ld.CIT(A) was of view that application dated 10.07.2012 before AO was not application u/s 154, therefore, held that no appeal lies on letter dated 10.07.2012. Accordingly Ld.CIT(A) dismissed appeal of assessee, hence appeal is file by assessee before us. 5. During appeal hearing Ld.AR submitted that AO passed consequential order determining refund but not granted interest thereon. As per provisions of Act, assessee is entitled for refund u/s 244 of Act. Therefore, assessee requested for grant of interest on refund vide application dated 10.07.2012 which was rejected by AO vide letter dated 08.08.2012. Since there is no prescribed proforma for application u/s 154, application filed by assessee requesting for grant of interest on refund tantamounts to petition u/s 154 and accordingly, order given by AO vide letter dated 08.08.2012 is order u/s 154, hence, requested to treat order dated 08.08.2012 of AO as 154 order and adjudicated issue on merits. Thus argued that Ld.CIT(A) has erred in rejecting appeal filed by assessee as 4 I.T.A. No.413/Viz/2018, A.Y.2000-01 M/s Sri Sarvaraya Sugars Ltd., Chelluru infructuous. Hence, requested to remit matter back to file of CIT(A) to decide issue on merits. 6. On other hand, Ld.DR supported orders of lower authorities. 7. We have heard both parties and perused material placed on record. In instant case, though AO has given effect to order of this Tribunal and determined refund, no interest was granted to assessee and no reason was given in order for not granting interest on refund determined by AO. Thus, there was mistake in order of AO, hence, application filed by assessee dated 10.07.2012 required to be treated as application u/s 154 for rectification of mistake and letter of AO dated 08.08.2012 partakes character of order u/s 154. Hence, we hold that letter dated 08.08.2012 of AO required to be considered as order u/s 154 and issue with regard to interest on refund required to be adjudicated on merits. In instant case, Ld.CIT(A) summarily rejected assessee s application as infructuous. Therefore, we remit matter back to file of Ld.CIT(A) with direction to treat letter dated 08.08.2012 as order u/s 154 and decide issue on 5 I.T.A. No.413/Viz/2018, A.Y.2000-01 M/s Sri Sarvaraya Sugars Ltd., Chelluru merits after giving opportunity to assessee. Accordingly, appeal of assessee is allowed for statistical purpose. 8. In result, appeal of assessee is allowed for statistical purpose. Order pronounced in open court on 6th September, 2019. Sd/- Sd/- (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /Visakhapatnam /Dated : 06.09.2019 L.Rama, SPS /Copy of order forwarded to:- 1. Assessee M/s Sri Sarvaraya Sugars Ltd., Chelluru, Rayavaram Mandal, East Godavari Dist. 2. /The Revenue - Asst.Commissioner of Income Tax, Circle-1, Kakinada 3. Pr.Commissioner of Income Tax-2, Visakhapatnam 4. Commissioner of Income Tax (Appeals)-9, Hyderabad 5. , , /DR, ITAT, Visakhapatnam 6. / Guard file / BY ORDER // True Copy // Sr. Private Secretary ITAT, Visakhapatnam Sri Sarvaraya Sugars Ltd. v. Asst. Commissioner of Income-tax Circle-1, Kakinada
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