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of <h1>Interest on Refund Allowed for AY 2013-14 Despite Delay, Under Section 119(2)(b) and Section 244A</h1> <h3>Mohanbhai Madhavjibhai Bharad Versus Principal Commissioner of Income Tax 1</h3> Mohanbhai Madhavjibhai Bharad Versus Principal Commissioner of Income Tax 1 - [2024] 465 ITR 313 (Guj) Issues Involved:1. Entitlement to interest on the refund claim after condonation of delay in filing the return of income.2. Applicability of Circular No. 9/2015 in denying interest on belated refund claims.3. Fault attribution for the delay in filing the return of income.Summary:Entitlement to Interest on Refund Claim:The petitioners challenged the order by the Principal Commissioner of Income Tax, Rajkot, which did not grant interest on the refund claim despite the delay being condoned under section 119(2)(b) of the Income Tax Act, 1961. The petitioners argued that the delay was not attributable to them as they were not informed about the TDS deduction by the Executive Engineer of the Irrigation Department, who also failed to issue Form-16A. The Court held that the petitioners were not at fault for the delay and referenced the Supreme Court's decision in Tata Chemicals Limited, which established that the state must refund money received without right along with interest.Applicability of Circular No. 9/2015:The respondent contended that as per Circular No. 9/2015, no interest is admissible on belated claims of refund. However, the Court found that this circular pertains to supplementary claims of refund after the completion of assessment for the same year, which was not the case here. Therefore, the reliance on this circular to deny interest was misplaced.Fault Attribution for Delay:The petitioners argued that they were not at fault for the delay in filing the return of income as the Executive Engineer did not issue the mandatory Form-16A. The Court agreed, noting that the delay was not attributable to the petitioners but to the Executive Engineer's failure to provide the necessary documentation. Consequently, the Court held that the petitioners are entitled to interest on the refund claim as per section 244A of the Income Tax Act, 1961.Conclusion:The Court directed the respondent to grant interest on the refund claim from the date of TDS deposit till the date of refund, as per the provisions of section 244A of the Act, 1961. The exercise was to be completed within 12 weeks from the date of the order.
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