Point of Law: Taxation - Liability to pay additional interest - Interest u/s 244A(1A) would not accrue in cases of fresh assessment or reassessment; use of words ‘wholly or partly’ therein would again indicate that bar of interest accrual is confined only to that part of assessment that are occasioned by remittance/remand and would not extend to other concluded issues that give rise to refund u/s 153(5).

ORDER :

The tone for this judgment may be set by quoting what Richard Brinsley Sheridan, an acclaimed Irish dramatist of 18th century, on being asked by his tailor for at least the interest of his bill had retorted:

"It is not my interest to pay the principal, nor my principle to pay the interest".

2. Petitioner Assessee inter alia engaged in the business of manufacture of computer software & providing IT enabled services, is knocking at the doors of Writ Court for assailing the order dated 29.03.2019, a copy whereof is at Annexure-A whereby the second respondent-DCIT having negatived its application dated 22.03.2019 filed u/s 244A(1A) of the Income Tax Act, 1961 (hereafter ‘1961 Act’) has denied additional 3% interest on the allegedly delayed refund of amount relatable to Assessment Year 2008-09.

3. The second respondent having contexted Section 244A(1A) of the Act has styled the operative portion of the impugned order as under:

“In this case, the Hon’ble ITAT, Bengaluru has remitted back the issue of Transfer Pricing to the AO for fresh assessment/re-assessment as per Para No. 5 & 6 of the ITAT order. Further, fresh approval has been taken from the Hon’ble Prl. CIT-7, Bengaluru for reference to the Transfer Pricing Officer and the same has been referred. The TPO re-computed the adjustments, based on the directions of Hon’ble ITAT, and TP order was passed on 31.10.2017.

As this is the case of fresh assessment/re-assessment, an additional interest u/s 244A(1A) will not be applicable in this case.”

4. After service of notice, the respondents having entered appearance through their Panel Counsel resisted the writ petition making submission in justification of the impugned order and the reasons on which it has been structured.

5. FACTS IN BRIEF:

(a) Petitioner's return of income for the Assessment Year 2008-09 declaring a total income of Rs.588,08,04,584/-having been selected for scrutiny u/s 143(2) of the Act, a reference was made to the Transfer Pricing Officer (hereafter ‘TPO’) qua the international transactions; the TPO in exercise of power u/s 92C(A) carried out an aggregate adjustment of Rs.10,54,52,192/-; the first respondent-Joint Commissioner of Income Tax (hereafter 'JCIT') had proposed a Draft Assessment Order dated 28.12.2011 u/s 143(3) r/w 144C(1), to which petitioner filed his Objections before the Dispute Resolution Panel (hereafter 'DRP'); in terms of DRP order dated 17.09.2012, the JCIT assessed the income at Rs.2389,89,57,307/-against the original amount of Rs.588,08,04,584/-supra.

(b) Both the Assessee and the Revenue having appealed against the above, the Income Tax Appellate Tribunal (hereafter 'ITAT') passed the order dated 4.1.2017 u/s 254 of the Act partly favouring the Assessee and remitted the case to TPO with a direction for re-computation of the Transfer Pricing Adjustment (hereafter 'TPA'); accordingly, the TPO re-computed the said adjustment in terms of direction of ITAT; the JCIT to give effect to the ITAT order, on 28.12.2017 determined the total income of the Assessee at Rs.693,88,05,177/-and the tax payable thereon was determined at Rs.206,69,34,730/-; however, the tax on book profit was higher at Rs.316,85,23,810/-; the above calculations eventually resulted in a refund of Rs.1057,45,30,057/-which included interest payable u/s 244A amounting to Rs.267,54,62,251/-.

(c) The files of the Assessee were transferred to another Assessing Officer i.e., second respondent-DCIT before whom Rectification Application dated 18.01.2018 was moved u/s 154; on a similar application being moved, the TPO made rectification of the adjustment u/s 92C(A) of the Act; since the Rectification Application dated 18.01.2018 was still pending, further Rectification Applications were also filed, followed by their summarization vide letters dated 17.05.2018 & 22.03.2019; the second respondent having considered the same, passed the im