Assessee wins appeal for additional interest under section 244A calculated from April 1st at 6% per annum

ITAT Pune allowed the assessee's appeal regarding additional interest claim under section 244A. The assessee argued that since the AO had previously granted interest under section 244A for a specific period, no further proof of TDS deduction and payment was required. The tribunal held that interest under section 244A must be calculated from April 1st at 6% per annum as prescribed. The matter was remanded to NFAC for fresh adjudication considering relevant documents and HC judgment, with directions to grant interest until actual refund receipt date following established precedent.

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Issues:
1. Grant of interest u/s 244A by the Assessing Officer.
2. Disallowance of interest u/s 244A by the CIT(A).
3. Calculation of interest u/s 244A from the date of filing the return.
4. Levying of interest u/s 234D.
5. Rectification application filed by the assessee.

Analysis:

Issue 1: Grant of interest u/s 244A by the Assessing Officer
The assessee, a charitable trust, filed for exemption u/sec. 11 of the Act, claiming a refund. The Assessing Officer (AO) granted interest u/s 244A in the intimation u/sec. 143(1) from 01/04/2018 to 16/11/2019. However, in the assessment order u/sec. 143(3), the interest was reworked, leading to excess interest granted and the levy of interest u/s 234D. The AO rejected the rectification application filed by the assessee concerning the interest calculation.

Issue 2: Disallowance of interest u/s 244A by the CIT(A)
The CIT(A) disallowed the claim for additional interest u/s 244A, stating that TDS deduction proof was lacking. The CIT(A) erred in not appreciating that the TDS amount was accepted by the AO, and the interest was granted based on this amount. The CIT(A) also failed to consider that interest u/s 244A should have been allowed from the first day of the assessment year.

Issue 3: Calculation of interest u/s 244A from the date of filing the return
The contention arose regarding the calculation of interest u/s 244A from the date of filing the return. The assessee argued that interest should be calculated from 01/04/2018, as the return was filed within the extended due date prescribed by CBDT circular, thus making them eligible for interest from the beginning of the assessment year.

Issue 4: Levying of interest u/s 234D
The AO levied interest u/s 234D in the assessment order, which was a point of contention for the assessee. The assessee filed a rectification application, challenging the interest calculation under this section.

Issue 5: Rectification application filed by the assessee
The assessee filed a rectification application u/sec. 154, contesting the interest calculation under u/s 244A and u/s 234D. The AO rejected this application, leading to further dispute regarding the correct calculation of interest owed to the assessee.

In conclusion, the Appellate Tribunal found in favor of the assessee, setting aside the order of the NFAC and remanding the matter for a fresh adjudication considering the documents on record and relevant legal precedents. The Tribunal emphasized the need for a detailed examination of the facts and compliance with legal principles, directing the NFAC to issue a speaking order in accordance with the law and principles of natural justice.

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