The assessee was entitled to interest under section 244A of the Act on the excess payment of MAT.

1. - The instant appeal has been preferred by the Commissioner of Income-tax, Kota, for the assessment year 2000-01, assailing the order dated February 28, 2006, passed by the learned Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (In short "the ITAT"), for quashing the order under section 263 of the Income-tax Act, 1961, in short ("the Act").

2. The brief facts of the case are given here under :

The respondent-company being a limited company filed its return on November 30, 2000, declaring nil income and paid taxes of Rs. 17,17,98,327 under minimum alternate tax) (in short "MAT") on book profit under section 115JA of the Act. The return was processed under section 143(1)(a) by the Assessing Officer on March 30, 2001, and the tax/MAT was also computed by the Assessing Officer on the book profit disclosed by the respondent at Rs. 16,03,07,717. In view of the payment of excess tax paid under MAT at Rs. 17,17,98,327 the Assessing Officer worked out a refund of Rs. 1,74,90,610 (17,17,98,327-16,03,07,717) and directed for issuing a refund of Rs. 1,95,89,482) to the respondent-company including interest under section 244A of the Act, accordingly, the refund was issued along with interest.

3. The respondent-company further moved an application under section 154 of the Act on August 27, 2001, claiming further interest under section 244A for the period April 1, 2001, to July 18, 2001. The Assessing Officer, being satisfied granted further interest under section 244A amounting to Rs. 6,12,171 for the balance period as claimed.

4. The learned Commissioner of Income-tax, Kota, in short ("the CIT") while issuing notice under section 263 of the Act, had held that the two orders passed by the Assessing Officer dated March 30, 2001, as well as dated June 13, 2002, were erroneous and prejudicial to the interests of the Revenue on the basis that tax has been paid by the assessee under MAT on the book profit under section 115JA of the Act, which cannot be equated with payment of the advance tax by the respondent on its total income/current income which is chargeable to tax following the financial year under consideration and further that the proviso to sub-section (2) of section 115JAA dealing with the tax credit in respect of tax paid on deemed income relating to certain companies, clearly stated that no interest shall be payable on the tax credit alone under sub-section (1) thereof. Accordingly, the Commissioner of Income-tax by invoking the provisions of section 263 of the Act directed the Assessing Officer to withdraw the interest so granted under section 244A of the Act, amounting to Rs. 21,98,872 and further Rs. 6,12,171 respectively which was allowed, vide two orders dated March 30, 2001, and June 13, 2002, referred to herein above.

5. Aggrieved by the order passed by the learned Commissioner of Income-tax, the respondent-company preferred an appeal before the learned Income-tax Appellate Tribunal who, after detailed examination of facts and various judgments and the scheme of section 115JA of the Act allowed the appeal of the respondent-company and quashed the order under section 263 of the Act passed by the Commissioner of Income-tax, Kota.

6. Being aggrieved by the said order passed by the learned Income-tax Appellate Tribunal the appellant preferred the instant appeal under section 260A of the Act.

7. The appellant has raised and claimed that the following substantial questions of law arise out of the order of the learned Income-tax Appellate Tribunal :

"(1) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was legally justified in setting aside the order passed by the learned Commissioner of Income-tax under section 263 by holding that the same was not warranted ?

(2) Whether the findings of the Tribunal are perverse in holding that the proviso to section 115JAA(2) was not applicable in the facts and circumstances of the case ?

(3) Whether the Tribunal was legally justified in upholding the order