The Ahmedabad bench of the Income tax Appellate Tribunal, in a recent decision held that the Tribunal, under the provisions of the Income Tax Act, 1961, has no power to give directions to the Assessing Officer in matters relating to granting interest on refund.
In the instant case, the assessee approached the Appellate Tribunal against the decision of the lower authorities who refused to grant interest to them on Refund allowed to them through the High Court order in connection with double payment of TDS. While disallowing interest, the first appellate authority pointed out that the appellant has suo-moto deducted TDS twice and deposited the same with the exchequer. Secondly, there is no provision in the Income tax 1961 to grant interest on refund of double deducted TDS amount . It was further noted that no such direction was passed by the High Court while allowing the refund to the assessee. Aggrieved with the order the assessee filed an appeal before the Tribunal praying for a direction to grant interest on the refund amount.
While rejecting the plea of the assessee, the Tribunal emphasized that “Authorities under the Income Tax Act, viz. Income Tax Officer, Commissioner of Income Tax or the Income Tax Appellate Tribunal are the creature of the Income Tax Act. They derive their source of power from the Income Tax Act only. The ld.Revenue authorities have declined the prayer of the assessee for the reason that it failed to bring any provision of the Act to their notice which authorizes authorities to exercise their power in favour of the assessee. During the course of hearing, I also put a query to the ld.counsel for the assessee as to how in the present proceedings assessee can enforce its right to interest. The ld.counsel for the assessee was unable to point out any provision in the Income Tax Act, which can empower the Tribunal to give directions to the AO for grant of interest on such refund.”
Based on the above findings, the Single Member dismissed the appeal by observing that “I have perused all the decisions referred by the ld.counsel for the assessee including the decision of the Hon’ble Gujarat High Court in the case of FAG Bearings India Ltd (supra). All these decisions were rendered while exercising power under Article 226 and 227 of the Constitution of India. These directions have not been given by enforcing of any provision of Income Tax Act. The Tribunal has no such power. It can only enforce violation of any provision which is subject to the appellate jurisdiction. Therefore, I do not find any merit in this appeal of the assessee.”
Read the full text of the order below.
