The Income Tax Appellate Tribunal (ITAT), Bench Mumbai, has recently in a writ petition filed before it, held that the withdrawal of interest on refund u/s 244 A (2), is beyond the scope of rectification as per the provisions of section 154 of the of the Income Tax Act, 1961.
The above said order was made by the ITAT when the assesse appellant has, via a writ petition filed before it, challenged the correctness of an order passed by the Commissioner of Income Tax (Appeals), (CIT(A)), in the matter of rectification of mistake under section 154 read with section. 143(3) of the Income Tax Act, 1961, for the assessment year 2010-11.
The contention of the appellant was that the CIT(A), has erred in upholding the withdrawal made by the A.O, who is the Deputy Commissioner of Income Tax, of the interest amounting to Rs.43,71,038 under section 244A of the Income Tax Act, and also that the CIT (A)’s act of upholding the initiation of rectification proceedings by the AO, who lacks jurisdiction under section 154 of the Act, is erroneous.
On hearing the contentions of either sides, perusing the material on record and considering the facts of the case in the light of the applicable legal position, the tribunal relied upon the observations of the co-ordinate bench decision in the case of DBS Bank Ltd. vs DDIT.
And allowing the appeal in favor of the assesse appellant, the tribunal commented: –
“We are in respectful agreement with the views so expressed by the co-ordinate bench ,and respectfully following the same, we uphold the plea of the assesse to the extent that given the limited scope of section 154 for rectification of mistakes apparent on record ,and given the fact that the period to be excluded for grant of interest has not yet been taken a call on by the PCCIT/CCIT/PCIT or the CIT, the impugned withdrawal of interest under section 244A(2) is beyond the scope of rectification of mistake under section 154. The order under section 154 is thus set aside , and the assesse gets the relief accordingly.”
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