AI Drafter 
TaxTMI 
TaxTMI 
2022 (7) TMI 1077
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....n-grant of interest U/s 244A of RS.33,38,380/- on tax refund amount in the rectification order dated July 31, 2020 passed U/s 154 of the IT Act, 1961. 3. The CIT(A) erred in making the following irrelevant, incorrect and / or immaterial observations in the order passed U/s 250: (1) The appellant has tried to link the rectification application dated April 05, 2018 with the rectification order dated July 31, 2020; (2) The rectification application dated April 05, 2018 appears to not have been disposed off by the Assessing Officer; and (3) The ground raised by the appellant are not arising out of the order dated July 31, 2020 as passed by the AO U/s 154, so the same cannot be adjudicated. 4. The CIT(A) failed to appreciate that: (1) The tax refund determined in the assessment order dated March 28, 2018 was actually granted to the appellant only on July 27,2020 i.e. after the delay of 29 Months; and (2) The Assessing Officer had passed rectification order dated July 31, 2020 U/s 154 pursuant to the rectification application dated April 05, 2018 and application dated July 29,2020 of the Appellant; 5. The appellant t....
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....undable was Rs.2,30,23,320/- as against the tax refund amount of Rs.2,91,90,560/- determined in the assessment order. Therefore, the assessee filed rectification application dated 05.04.2018 with reference to short computation of tax liability of Rs.61,67,240/- and requesting to grant the correct amount of tax refund of Rs.2,30,23,320/- as against the tax refund amount of Rs.2,91,90,560/- determined in the assessment order. Pursuant to rectification application, the income tax refund amount of Rs.2,91,90,560/- was granted and the same has been credited in the assessee company's bank account on 27.07.2020 as against the correct amount of Tax refundable of Rs.2,30,23,320/-. (refer factual Paper Book Page 50-51) . The excess amount of tax refund of Rs.61,67,240/- granted wrongly was immediately deposited by the assessee company on the very next day i.e. on 28.07.2020 in Central Govt. account. (refer Factual Paper Book Page 52). Considering the above, an order dated 31.07.2020 under section 154 of the Income tax Act, 1961 has been passed by the Joint Commissioner of Income tax (OSD), Central Circle 2(2), Bangalore rectifying the above mistake in short computation of tax liability a....
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....#39;no objection' of the appellant. As regards the rectification application dt. 05.04.2018, the same appears to not have been disposed off by the AO. The appellant also does not appear to have challenged this inaction on the party of the AO in not disposing of its rectification application within the prescribed time limit of six months. It is also not the case of the appellant that the interest under Section 244A had earlier been allowed to it but withdrawn vide rectification order dt. 31.07.2020. 4.4 Since the grounds of appeal raised by the appellant are not arising out of the order dt. 31.07.2020 as passed by the AO under Section 154 of the Act, so the same cannot be adjudicated here. Considering above the grounds of appeal of the appellant are dismissed." 6. Aggrieved by the order of the CIT(A), the assessee has filed this appeal before the Tribunal claiming that interest u/s 244A of the I.T.Act for the delayed period refund of 29 months. The learned AR has filed two sets of paper book. One set comprising of 193 pages enclosing therein the case laws relied on, the CBDT Instructions. The other set comprising of factual paper book enclosing therein the acknowledg....
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....44 - 45 23 Short computation of tax liability 61,67,240 44 - 45 24 Tax Refund amount determined in assessment order dated March 28th 2018 291,90,560 41 25 Correct amount of tax refund 2,30,23,320 44 - 45 26 Date of filing application u/s. 154 for granting Tax refund amount of Rs. 2,30,23,320/- April 05, 2018 44 27 Actual date of grant of Tax refund amount July 27th 2020 50 - 51 28 Amount of Tax refund granted 291,90,560 51 29 Tax Refund amount excess granted by Rs. 61,67,240 30 Excess tax refund amount deposited on July 28th 2020 July 28th 2020 52 31 Date of passing rectification order July 31st 2020 55 - 56 32 Non grant of interest with respect to delayed grant of tax refund amount from March 28^th 2018 to July 27th 2020 For a period of 29 months 23 - 43 55 - 56 33 Interest amount on tax refund for delayed period of 29 months 33,38,380 2.3. The issue whether the assessee would be entitled to interest for delay in grant of tax refund amount determined in the assessment order dated March 28th 2018 but was actually granted on July ....
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....CIT [1989] 175 ITR 535 105 - 111 Held 106 10. Mumbai ITAT in Kotak Mahindra Bank Ltd. Commissioner of Income-tax [2022] 134 147 (Mumbai - Trib.) 112 - 129 4.6.1 & 4.8 128 & 129 V Interest under section 244A to be assessee is not at fault and on the refund due 11. Delhi High Court in the case of Own ITR 273) 130 -172 16,18,26 27,33,34 49,50 & 57 154,155, 158,159, 168,169, 171,172 12. Himachal Pradesh High Court in PCIT Daria Kashlog Mangoo Transport Co-(114 taxmann.com 527) 173 - 179 12 179 13. Bombay High Court in the case of PCIT-Skanska HCC ITOCHU Group (102 416) 180 -190 8 189 14. Circular No.20-D (XXIl-22) dated 191 191 15. CBDT Instruction No. 7/2013, dated 15- 192-193 192-193 2.4. In accordance with the settled legal position as stated above, the Appellant would be entitled to the amount of interest on the tax refund amount as per workings given below. Particulars Tax refund Interest Total Tax refund amount 2,30,23,320 2,30,23,320 Add: Interest U/s 244A: Tax refund determined upon com....
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....(i.e., the delay for a period of 29 months in granting tax refund amount which was determined in the assessment order dated 28.03.2018). 9. Interest u/s 244A of the I.T.Act shall be granted to the assessee on delayed refund subject to the provision of said section. In other words, the A.O. while granting refund u/s 237 of the I.T.Act, ought to have calculated interest u/s 244A of the I.T.Act for the delayed refund, unless the delay is caused by the assessee's fault. The CBDT in its Instruction No.7/2013 dated 15th July, 2013, has endorsed the observation of the Hon'ble Delhi High Court in case of own motion v. UOI & Others in WP(C) 2659/2012 dated 14.03.2013, wherein, the Hon'ble High Court had held that the assessee cannot be denied interest on refund unless the delay is caused by the assessee's fault. Further, the Hon'ble High Court held that even in cases where the assessee is rightly denied interest on refund, the A.O. has to provide a written explanation for the denial. When the refund was finally given on 27.07.2020, the A.O. ought to have calculated interest u/s 244A of the I.T.Act while granting refund (For the delayed refund by 29 months). The rectification order dated ....