TaxTMI 
TaxTMI 
2010 (10) TMI 857
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..... This issue stands decided by our decision in CIT vs. Kerala Chemicals and Proteins Ltd. (2010) 231 CTR (Ker) 541 : (2010) 37 DTR (Ker) 256 : (2010) 323 ITR 584 (Ker), wherein we have held that the interest is payable only from the date of introduction of the provision, that is, 1st June, 2003. 2. The next question raised is with regard to the date with reference to which the assessee is entitled to interest under s. 244A of the IT Act on the refund paid to it. The AO declined interest because the refund is attributable to an additional claim of deduction of provision for bad debt which was allowed by the first appellate authority. However, in appeal, the first appellate authority held that assessee is entitled to interest under ....
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....id by way of advance tax or treated as paid under s. 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted:- Provided no interest shall be payable if the amount of refund is less than ten per cent of the tax determined under sub-s. (1) of s. 115WE or sub-s. (1) of s. 143 or on regular assessment. (b) in any other case, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period or periods from the date or, as the case may ....
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....essee. In the case of payments covered by cl. (a) of s. 244A(1) interest is payable from the beginning of the relevant assessment year till the date of grant of refund. However, in the case of payments of tax in any of the forms other than those referred to in sub-cl. (a) interest is provided in cl. (b) of s. 244A from the dates of payment of such tax or penalty till the date of grant of refund. This case is obviously covered by cl. (a) and so much so assessee is entitled to interest on excess refund from the beginning of the assessment year till the date of grant of refund which is granted by the Tribunal. However, the question is whether operation of sub-s. (2) justifies denial of interest for any period thereof as claimed by the Revenue.....
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....ated claim of deduction of provision for bad debt under s. 36(1)(vii)(a) will disentitle the assessee from getting interest on refund upto the date of making claim. Admittedly, the assessee did not make any claim for deduction of provision for bad debt in the original return filed. However, before completion of the assessment the assessee made a claim of deduction of provision for bad debt on 10th Jan., 2001, which was rejected by the AO for failure to establish the claim by the assessee. The CIT(A) in the appeal filed against the assessment, allowed the claim and remanded the matter to the AO. Refund is granted to the assessee while issuing the revised order based on order in appeal filed by the assessee. The question to be considered is w....
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....m of deduction made on 10th Jan., 2001 by the assessee will not justify denial of interest otherwise eligible under s. 244A(l)(a) from 1st April, 1999 to 10th Jan., 2001. We, therefore, uphold the order of the Tribunal declaring assessee's eligibility to get interest from 1 st April, 1999 till date of refund. 8. We notice a lacuna in the statute in the above provision because the situation that arose in this case is not contemplated therein. The Department could contend that if all claims of deduction were made in the original return and higher amount of refund was claimed in such return, the officer could have granted refund under s. 143(1) of the Act itself thereby avoiding interest on refund in regular assessment for longer per....