2021 (4) TMI 752

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....e appeal. 2.While giving effect to the order of the Tribunal, the ITO allowed the refund but denied the interest under Section 244A with interest on interest and the assessee sought for a relief of Rs. 27,73,543/-. Aggrieved over the said order, an appeal was filed before the Commissioner of Income Tax (Appeals), who followed the judgment of Sandvik Asia Limited reported in 280 ITR 643 (SC) and allowed the appeal of the assessee. Challenging the same, the Revenue filed an appeal before the Income Tax Appellate Tribunal and the Tribunal, relying upon the judgment reported in 320 ITR 88, dismissed the appeal, against which the Revenue has filed the above appeal. 3.The above appeal was admitted on the following substantial questions of l....

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....Delhi High Court in CIT Vs. Indian Farmer Fertilizer Co-operative reported in [2015] 374 ITR 56 (Delhi), held that to the extent it directs payment of any sum over and above interest payable under Section 244A(1) to the assessee cannot be upheld. 6.The relevant portion of the judgment of the Hon'ble Division Bench of Delhi High Court in CIT Vs. Indian Farmer Fertilizer Cooperative reported in [2015] 374 ITR 56 (Delhi), reads as follows: "... 7.Section 244A(1)of the Income Tax Act reads as follows : "244A. Interest on refunds.- (1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount,....

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....nsider that judgment now as binding authority. More importantly, Sandvik Asia Ltd. (supra) was explained by the larger Bench i.e. three Judge Bench decision in Gujarat Fluoro Chemicals (supra) where the Supreme Court categorically held that the only amount which an assessee aggrieved by delayed payment can legitimately claim under the statute is interest and that "no other interest on such statutory interest" is payable. This ruling, in the opinion of this Court, rendered by a larger Bench, would have to be followed as opposed to the ratio in H.E.G. Ltd. (supra) where the Supreme Court had expressed a contrary opinion by indicating that the interest component towards the delayed payment of the tax refund would partake of the character of th....