Tribunal directs Assessing Officer to refund appellant for interest under Income Tax Act

The Tribunal allowed the appeals, directing the Assessing Officer to calculate interest and refund the amount due to the appellant in accordance with section 244A of the Income Tax Act for assessment years 1993-94 and 1994-95.

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Issues:
Appeal against CIT(A) orders for assessment years 1993-94 and 1994-95 regarding the refund of principal tax amount and interest under section 244A of the Income Tax Act.

Analysis:
1. Grounds of Appeal:
The appellant contested the CIT(A)'s decision regarding the refund legally due, comprising the principal tax refund and unpaid interest, along with interest under section 244A of the Act for assessment year 1993-94. The grounds were common for both years, except for the figures. The appellant argued for the refund legally due and interest on the unpaid amount as per the Act's provisions.

2. Factual Background:
The appellant, a liquor vendor, filed returns for assessment years 1993-94 and 1994-95, claiming refunds. The Department issued refunds, but the appellant sought rectification under section 154 for both years. The Assessing Officer rejected the rectification application, citing no apparent mistake. The appellant moved to the CIT(A) challenging the rejection.

3. Arguments Before CIT(A):
The appellant argued before the CIT(A) that the judgment cited by the Assessing Officer was not applicable post 1989-90, as section 244A governed interest on tax refunds. The CIT(A) rejected the appeal, noting differences in the provisions pre and post 1989-90.

4. Tribunal's Decision:
The Tribunal considered the arguments of both parties and found it to be a case of interest calculation on the refund due as per the law. It noted that the Assessing Officer had erred by following a judgment based on section 214 instead of section 244A. The Tribunal remitted the case to the Assessing Officer to calculate interest and issue refunds as per section 244A for both years.

5. Conclusion:
The Tribunal allowed the appeals for statistical purposes, directing the Assessing Officer to calculate interest and refund the amount due to the appellant in accordance with section 244A of the Income Tax Act. The decision was pronounced in open court on June 15, 2012.

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