Page 112 - DTPA Journal December 21
P. 112
e Journal
eJournal
Nov. - Dec., 2021
reliance is placed on following judicial the department is chargeable to tax.
pronouncements: Difficulty, however, arises in the case where
i) When a provision is inserted/deleted to the department has allowed the interest to an
remedy unintended consequences it assessee on the amounts of refund but
should be given a retrospective effect - subsequently as a result of appeal order, such
interest has to be paid back to the department.
CIT vs. Alom Extrusions Ltd. [2009]
319 ITR 306 (SC). Recommendation:
ii) When a provision is inserted/deleted so a) There should be specific provisions in
as to mitigate hardship caused to the the Act that any repayment of interest
assessee, it should be given retrospective earlier allowed by the department and
effect - CIT vs. Calcutta Export included in the taxable income is
Company [2018] 404 ITR 654 (SC). allowable as deduction in the year such
interest is re-paid to the department.
Accordingly, we request that CBDT should
issue a clarification that the said circular b) Further, it should be specifically
will apply to all matters which are pending provided in the Act that amount of
in Courts and the complaints already filed interest allowed by the department will
may be withdrawn based on any be chargeable only in the year in which
undertaking or conditions, as may appear amount is actually received by the
just and equitable to Your Honours. assessee by way of cheque or credit in
the bank account or on intimation or
23.2 The limit prescribed under the said Circular information is received for adjustment
“the tax sought to be evadedis more than of refund against any demand.
Rs.25 Lakhs” is on the lower side Similarly, deduction is to be allowed in
considering the diminishing value of the year the assessee has actually repaid
money. Therefore, our humble suggestion is the interest to the department.
that the Monetary limit should be revised to
at least Rs.1 Crore of tax for initiating any c) As a matter of clarification it may also
be specifically provided under law that
prosecution.
any interest paid by the assessee to the
23.3 Your honour has taken commendable steps department will not be allowable as
by removing prosecution provisions under deduction and any refund out of the
the Companies Act, 2013. On the same line, same received in subsequent year will
it is appropriate time that prosecution not be included in the taxable income.
provisions under the Income tax Act also
should be omitted. There are enough Kindly consider the above suggestions.
provisions for levy of penalty in We assure your honour of our full
appropriate cases. co-operation in encouraging taxpayers to
make proper tax compliance.
24. Specific provisions in the Act for payment
or refund of interest to and from Adv. Kamal Kumar Jain Narayan Jain
department: President, DTPAChairman, Representation Committee
Email : kamalkrjain@yahoo.com Email : npjainadv@gmail.com
As per the existing legal position any interest
paid by the assessee to the department is not CC to :
Chairman,
allowable whereas any interest received from Central Board of Direct Taxes, North Block,
New Delhi-110001
108
e-JOURNAL
e-JOURNAL
