2017 (1) TMI 1713 - HC - Income Tax

Court orders review of interest refund claim on TDS payment, sets 60-day deadline for decision

IJM Corporation Berhad Versus Assistant Commissioner of Income Tax and others

The court directed the respondent to reexamine the petitioner's claim for interest refund on TDS paid and deposited with the revenue. The court emphasized ... Claim for refund of interest on the TDS - interest on the TDS deposited under section 201(1) and 201(1-A) of the Income Tax was not refunded and claiming refund of the interest which was deposited, once TDS has been refunded this writ petition has been file - HELD THAT:- Delay in deposit of TDS interest is liable to be paid in law which becomes non refundable. Be it as it may be the fact remains that the question of refund of interest to the petitioner in accordance to the law has to be decided and as respondent no.2, the competent authority has not taken any decision in this regard, we deem it appropriate to remand the matter back to respondent no.2 for considering the question of refund of the interest to the petitioner. Accordingly, we dispose of this petition in the following manner: On the petitioner's filing a certified copy of this order alongwith detailed claim for refund of interest on the TDS paid by the petitioner and deposited with the revenue by the respondent no.3 alongwith interest, respondent no.2 shall consider the claim of the petitioner, if required, hear the petitioner and respondent no.3 and thereafter pass appropriate order with regard to the claim made for, refund of the interest in accordance with law . The aforesaid exercise be completed and a final decision taken in accordance with law after hearing all concerned preferably within a period of 60 days from the date of receipt of certified copy of this order. Issues:Claim for refund of interest on TDS paid by the petitioner and deposited with the revenue.Analysis:The petitioner was awarded a contract by the National Highways Authority for road construction, and certain tax deductions were made under the TDS scheme. Subsequently, assessments revealed that the petitioner had suffered losses, and no tax liability was imposed, resulting in the refund of TDS amounts. However, interest on the TDS deposited was not refunded. The respondent argued that the refund of interest should be in accordance with statutory provisions and that it may not be fully refundable. The court held that the question of interest refund needed proper examination and directed the matter to be remanded back to the competent authority for a decision on the refund of interest to the petitioner. The court ordered the respondent to consider the petitioner's claim for interest refund, hear all concerned parties, and make a decision within 60 days from the date of the order.In conclusion, the court disposed of the petition by instructing the respondent to review the petitioner's claim for interest refund on TDS paid and deposited with the revenue. The court emphasized that the decision on interest refund should be made in accordance with the law after due consideration and hearing of all concerned parties. The court set a timeline of 60 days for the respondent to complete the review process and make a final decision on the interest refund claim.