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High Court grants interest under Section 244A of Income Tax Act clarifying refund entitlement. The High Court allowed the writ petition, granting the petitioner interest under Section 244A of the Income Tax Act from a specified date until the date ...
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High Court grants interest under Section 244A of Income Tax Act clarifying refund entitlement.
The High Court allowed the writ petition, granting the petitioner interest under Section 244A of the Income Tax Act from a specified date until the date of payment. The judgment clarified the distinct applicability of Sections 132B(4) and 244A of the Act and emphasized the entitlement to interest on delayed refunds under the relevant legal provisions.
Issues: - Quashing of order restricting interest on seized amount - Direction for interest payment on seized amount for specific period
Quashing of Order Restricting Interest: The petitioner filed a writ petition seeking to quash an order restricting interest on a seized amount until the date of assessment. The cash was seized by the Income Tax Department, and despite various legal proceedings and appeals, the amount was refunded to the petitioner after almost five years. The petitioner argued that interest should be paid for the period the amount was withheld. The respondents contended that interest had been paid as per Section 132B(4) of the Income Tax Act, citing a previous decision by the Madhya Pradesh High Court.
Interest Payment for Specific Period: The main issue revolved around the lack of justification for withholding the seized amount without any pending demand against the petitioner. The respondents did not dispute this fact but argued that no provision existed for additional interest payment. The Court examined Sections 132B(4) and 244A of the Act along with Article 300A of the Constitution of India. It noted that while Section 132B(4) deals with interest until the completion of assessment, Section 244A covers interest on delayed refunds. The Court emphasized that these provisions are independent and not overlapping. Disagreeing with the Madhya Pradesh High Court's view, the Court held that the petitioner was entitled to interest under Section 244A of the Act for the relevant period.
In conclusion, the High Court allowed the writ petition, granting the petitioner interest under Section 244A of the Act from a specified date until the date of payment. The judgment clarified the distinct applicability of Sections 132B(4) and 244A of the Act and emphasized the entitlement to interest on delayed refunds under the relevant legal provisions.
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