ITAT dismisses Revenue's interest appeals, orders interest for full month; Assessee's rectification appeal partly allowed.

The Revenue's appeals disputing the grant of interest under Section 244A were dismissed by the ITAT, following precedent set in a similar case involving Maruti Suzuki India Ltd. The Assessing Officer was directed to allow interest for the entire month, even if payments were made on the last day. The Assessee's appeals seeking rectification of interest computation were partly allowed, with the matter remanded to the Assessing Officer for fresh computation. The ITAT's decision was pronounced on 17/03/2021 and finalized on 18/03/2021.

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Issues:
1. Dispute regarding interest under Section 244A of the Income Tax Act, 1961 for Assessment Years 1995-96, 1996-97, and 1997-98.

Analysis:

A. Revenue Appeals (ITA Nos. 600/Del/2014, 601/Del/2014, 602/Del/2014):
1. The Revenue disputed the direction of the Ld. CIT(A) to grant interest under Section 244A for the full month even if tax payments were made on the last day of the month. The Revenue contended that for constituting part of the month, at least one full day should be completed, not just a few hours. However, both sides agreed that the issue was decided in favor of the assessee in a Co-ordinate Bench order of ITAT, Delhi, dated 31/08/2020, in a similar case involving Maruti Suzuki India Ltd. The ITAT upheld that interest should be granted for the month even if payments were made on the last day, citing provisions of the Act and analogies from other sections.

2. The ITAT found no material to distinguish the current case from the precedent set in the Maruti Suzuki case. Both the Revenue and the assessee's representatives agreed that the issue had already been decided in favor of the assessee. Consequently, the appeals by the Revenue were dismissed, and the Assessing Officer was directed to allow interest under Section 244A for the entire month, even if payments were made on the last day.

B. Assessee Appeals (ITA Nos. 469/Del/2014, 470/Del/2014, 471/Del/2014):
1. The Assessee sought rectification of errors in computing interest under Section 244A by the Assessing Officer. Both sides agreed during the hearing that the matter should be restored to the Assessing Officer for fresh computation of interest under Section 244A, as allowable to the assessee. The ITAT agreed with this approach and directed the matter to be reconsidered by the Assessing Officer, providing a reasonable opportunity to the assessee for fresh computation.

2. Consequently, the appeals filed by the assessee were disposed of with the direction to reassess the interest computation under Section 244A. For statistical purposes, these appeals were treated as partly allowed.

C. Conclusion:
In conclusion, the appeals filed by the Revenue were dismissed, and those filed by the assessee were partly allowed. The ITAT's order was pronounced orally on 17/03/2021 and signed in writing on 18/03/21.

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