TaxTMI 
TaxTMI 
2015 (3) TMI 280
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....on 244A on the principal refund amount claimed by it." 3. The assessee's returns for the year 1997-98 and 1998-99 were processed under Section 143(1). It is the admitted case of the parties that the requisite advance tax payments were completed within the time specified i.e. 1.4.1997 and 1.7.1998. The assessments were thereafter framed under Section 143(1) and adjustment of the tax was made - for the year 1997-98 on 30.6.1998 and for the year 1998-99, on 19.3.1999. The assessee was aggrieved and claimed that apart from the refund of that there was a delay in payment of interest which worked out to Rs. 2,55,19,914/-, for the two assessment years in terms of Section 244A, at rates prescribed during that period. The AO had denied the amount....
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.... for the assessee to claim the interest. Ld. Commissioner of Income Tax (Appeals) further observed that assessee has also sought that it be granted interest on the delayed payment of interest, relying on the Apex Court judgement in the case of Sandvik Asia Ltd. vs. C.I.T. & Others (280 ITR 643). The Ld. Commissioner of Income Tax (Appeals) found that the said decision ITA NOS. 3398-3399/DEL/2011 is distinguishable from the facts of the present case. Ultimately, Ld. Commissioner of Income Tax (Appeals) held that interest of justice would be met by granting the interest u/s. 244A upto the date of adjustment of the refund, and declined to order granting of interest on interest." 4. The ITAT relied upon the decision of the Supreme Court in S....
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....aced reliance upon the decision of the Supreme Court in Commissioner of Income Tax V. Gujarat Fluoro Chemicals 358 ITR 291. In that judgment, the Court noticed Sandvik Asia Ltd. (supra) and held pertinently as follows : "7. As we have already noticed, in Sandvik case (supra) this Court was considering the issue whether an assessee who is made to wait for refund of interest for decades be compensated for the great prejudice caused to it due to the delay in its payment after the lapse of statutory period. In the facts of that case, this Court had come to the conclusion that there was an inordinate delay on the part of the Revenue in refunding certain amount which included the statutory interest and therefore, directed the Revenue to pay co....
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....which is refunded. If the refund does not include interest due and payable on the amount refunded, the Revenue would be liable to pay interest on the shortfall. This does not amount to payment of interest on interest. An example will clarify the situation and help us to understand what is due and payable under Section 244A of the Act. Suppose Revenue is liable to refund Rs. 1 lac to an assessee with effect from 1st April, 2010, the said amount is refunded along with interest due and payable under Section 244A on 31st March, 2013, then no further interest is payable. However, if only Rs. 1 lac is refunded by the Revenue on 31st March, 2013 and the interest accrued on Rs. 1 lac under Section 244A is not refunded, the Revenue would be liable t....
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....om the 1st day of April of the assessment year to the date on which the refund is granted: Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 115WE or sub-section (1) of section 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 be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation.-For the purposes of this clause, "date of payment of tax or penalty" means the date on and from which the amount of tax or penalty specifie....