TaxTMI 
TaxTMI 
2000 (10) TMI 3
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....ome-tax Act, 1961 (for short, "the Act"). The petitioner has also prayed for issuance of a writ in the nature of mandamus directing the respondents to pay interest on the amount of tax paid by it in relation to the assessment year 1996-97. The facts necessary for deciding the issue raised in the petition are that by an order dated October 2, 1998, passed under section 143(3) of the Act, respondent No. 3 created a demand of Rs.26,81,17,875 against the petitioner. That order was upheld by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal. On February 9, 1999, the petitioner moved an application under section 10(23C)(iv) of the Act for grant of exemption. Vide notification dated April 6, 1999, the Central Boa....
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....ng, this court had declined the petitioner's prayer for directing the respondents to pay interest for the period commencing from February 9, 1999, and had issued notices on the limited question as to whether the respondents should pay interest for the period from April 9, 1999, to the date of refund. The relevant extract of that order is reproduced below: "Assessment in this case was framed under section 143(3) of the Income-tax Act, 1961 (for short, "the Act"), on October 7, 1998, and a sum of Rs.26,81,17,075 was recovered from the petitioner as tax. Thereafter, the petitioner moved an application for seeking exemption from income-tax under section 10(23C)(iv) of the Act on February 9, 1999, and the notification in this regard was issue....
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....as published on April 6, 1999. It was then the petitioner applied for rectification of the order of assessment on April 9, 1999. We are, therefore, satisfied that the delay in claiming refund was attributable to the assessee inasmuch as it did not apply for the same prior to April 9, 1999. In this view of the matter, we are satisfied that the petitioner-assessee is not entitled to any interest up to April 9, 1999. The next contention of learned counsel for the petitioner is that the Board should at least be given interest from April 9, 1999, till the date of refund when the application for rectification was allowed. Notice of motion to the respondents for August 29, 2000, on this limited issue." Shri A. K. Mittal argued that in vie....
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....entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely: (a) where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one 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 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 143 or on regular assessment; (b) in a....
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....her words, if the assessee is responsible for the delay in the finalisation of the proceedings on the basis of which he becomes entitled to refund, then the period of delay is to be excluded from the total period for which interest becomes payable. However, there is nothing in the plain language of sub-sections (1) and (2) of section 244A from which it can be inferred that the assessee can be deprived of the interest in respect of the period during which his application for refund remains pending before the competent authority. The argument of Shri Sawhney that the submission of an application for award of interest is implicit in the scheme of section 244A and interest cannot be claimed by the assessee as of right unless there is an unex....