TaxTMI 
TaxTMI 
2023 (12) TMI 1165
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....in all these petitions, they have been heard together and are disposed of by this common Judgment and Order. 4. Facts are taken from Special Civil Application No. 12466 of 2021 treating it as the lead matter for the sake of convenience. 4.1) The agricultural land of the petitioner was acquired by the State of Gujarat under "Survo Scheme" on 29.11.2001. The Land Acquisition Officer awarded compensation at the rate of Rs. 7.50 per sq. mtr. for irrigated land and Rs. 5/- per sq. mtr. On non-irrigated land. 4.2) Feeling aggrieved, the petitioner and other claimants filed Land Reference Cases before the Additional Senior Civil Judge, Gondal ('Reference Court') for additional compensation. 4.3) The Reference Court vide Judgment and Order dated 13.04.2011 awarded the additional compensation at the rate of Rs. 342/- per sq. mtr. for irrigated land and Rs. 275/- per sq. mtr. for non-irrigated land. 4.4) The State of Gujarat challenged the Judgment and Award passed by the Reference Court before this Court. This Court vide Judgment and Order dated 30.04.2012 directed the Irrigation Department to deposit 50% of the awarded amount with the Court and out of 50% amount, half of the amount wa....
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.... dated 31.10.2019 allowed the application by condoning the delay in filing the return of income to claim the refund by the petitioner for the Assessment Year 2013-2014. However, there was no observation about the entitlement of interest on the belated claim of the refund whereas in the other four cases, the very same officer in the capacity of PCIT-3, held that no interest would be admissible on the belated claim of refund where the delay was condoned as per the provisions of section 119(2)(b) of the Act, 1961 as per Circular 9/2015 (F. No. 312/22/2015-OT) dated 09.06.2015. 4.9) The petitioner, therefore, being aggrieved by the action of the respondent as well as the order passed by the respondent for not granting the interest on the claim of refund has preferred this petition. 4.10) The petitioner filed a return of income on 5.11.2019 with the Income Tax department and got the refund of the TDS amount which was deducted from the amount of interest amount paid as per the Judgment and Award of compensation passed by the Reference Court under section 28 of the Land Acquisition Act, 1894 by the Irrigation Department, Rajkot. In the return of income filed by the petitioner, interest ....
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....partment to deny the interest on refund. 5.4) Reliance was placed by learned advocate Mr. Sheth on the decision of Hon'ble Apex Court in the case of Union of India Through the Director of Income Tax v. Tata Chemicals Limited reported in (2014) 6 Supreme Court Cases 335, wherein the Hon'ble Apex Court has held that the State having received the money without right and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances and the obligation to refund money received and retained without right implies and carries with it the right to interest. 5.5) It was therefore, submitted that the respondent ought to have granted interest on the refund claim of the petitioners as there was no fault on the part of the petitioners as the petitioners could not file the return of income claiming refund in time and such return was filed after condoning delay by the respondent under section 119(2)(b) of the Act, 1961. 5.6) Learned advocate Mr. Sheth further submitted that as the interest on refund is liable to be paid to the petitioners under section 244A of the Act, 1961 and Circular No. 9/2015 which was issued subsequently could not be ....
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...., 1961 and Circulars. 6.1) It was submitted that as per the Circular No. 9/2015 dated 09.06.2015 issued by the Central Board of Direct Taxes in cases of condonation of delay in filing of return and claim of refund, no interest would be admissible on a belated claim of refund as per Para 6 (ii) of the said Circular and accordingly, the interest on refund has not been granted to the petitioners. 6.2) It was submitted that the contention of the petitioners that the delay is not attributable to the petitioners is not tenable since the respondent after considering the facts and circumstances condoned the delay in filing the return of income and the claim of refund was allowed. However, so far as interest on the refund claim is concerned, the same is rightly not granted to the petitioners in view of Circular No. 9/2015. 6.3) It was submitted that reliance placed on the decision in case of Tata Chemicals Limited (supra) is also not applicable in the facts of the case as the Hon'ble Apex Court issued directions to grant interest on refund as the assessee filed the return of income in time which was assessed and the Commissioner of Income Tax(Appeals) while allowing the appeal concluded ....
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....y the Delhi High Court and Instruction No. 7 of 2013 are not applicable in facts of the case. 6.6) It was submitted that at the time of condonation of delay in filing the return of income, the respondent authority was not required to decide the claim of interest on the refund claim as the refund is subject to the condition that no interest would be paid on refund in case of filing of belated return after condonation of delay as per Circular No. 9/2015. It was, therefore, submitted that the respondent has therefore, rightly not allowed any interest on the belated return in respect of the return of income for A.Y. 2013-2014 as the circular issued by the CBDT is binding upon the respondent authorities. Learned advocate Mr. Sanghani placed reliance on the following decisions in support of such a proposition : (1) Uco Bank Vs. Commissioner of Incometax (1999), (237 ITR 889) (SC). (2) Commissioner of Customs Vs. M/s. Indian Oil Corp. Ltd., (267 ITR 272) (SC). (3) Commissioner of Income-tax Vs. Anjum M. H. Ghaswala & Ors. (252 ITR 1) (SC). (4) Commissioner of Income-tax Vs. Nayana P. Dedhia (270 ITR 572) (Andhra High Court). 6.7) Relying upon the aforesaid decisions it was submi....
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.... merits in accordance with law;" SECTION 194LA : Payment of compensation on acquisition of certain immovable property Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income-tax thereon: SECTION 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, simple interest thereon calculated in the following manner, namely :-... xxx (2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee[or the deductor, as the case may be,] whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which i....
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.... of the Act be denied to the assessee where the assessee is not at fault. The observation of the Hon'ble High Court in Para 32 above be strictly kept in mind while dealing with such matters. 4. I am further directed to state that the above be brought to the notice of all officers working under your jurisdiction for necessary and strict compliance." Instruction No. 9/2015 dated 09.06.2015 "In supersession of all earlier Instructions/Circulars/Guidelines issued by the Central Board of Direct Taxes (the Board) from time to time to deal with the applications for condonation of delay in filing returns claiming refund and returns claiming carry forward of loss and set-off thereof under section 119(2) (b) of the Income-tax Act, (the Act) the present Circular is being issued containing comprehensive guidelines on the conditions for condonation and the procedure to be followed for deciding such matters. 2. The Principal Commissioners of Income-tax/Commissioners of Income-tax (Pr.CsIT/CsIT) shall be vested with the powers of acceptance/rejection of such applications/claims if the amount of such claims is not more than Rs. 10 lakhs for any one assessment year. The Principal Chief C....
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....further conditions: i. The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act. ii. No interest will be admissible on belated claim of refunds. iii. The refund has arisen as a result of excess tax deducted/collected at source and/or excess advance tax payment and/or excess payment of self-assessment tax as per the provisions of the Act." 8. The Hon'ble Apex Court in case of Union of India v. Hari Singh and others (Judgment dated 15.09.2017 passed in Civil Appeal No. 15041/2017)reported in (2018) 15 SCC 201, observed as under: "2. An admitted fact which is common in all these appeals is that while disbursing the compensation, the Land Acquisition Collector had deducted the tax at source and deposited the same with the Income Tax Department. These appellants preferred the writ petition in the High Court stating that no such deduction at source was permissible in view of the provisions of Section 194-LA of the Income Tax Act, 1961, since the land which was acquired was agricultural land and this provision categorically mentions that in respect of agricultural land, tax at source is not to be deducted. 3. There is ....
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....d with the Income Tax Department shall be refunded to these respondents. 7.2 While determining as to whether the compensation paid was for agricultural land or not, the Assessing Officer(s) will keep in mind the provisions of section 28 of the Land Acquisition Act and the law laid down by this Court in Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF) [2009 (8) SCC 412] in order to ascertain whether the interest given under the said provision amounts to compensation or not" 10. In view of the above decision, the Income Tax department has allowed the application made by the applicant to condone the delay in filing the return of the income to claim the refund and also issued the refund. However, the respondent did not grant any interest on the amount of refund though the delay cannot be said to be attributable to the petitioners in the facts of the case. 11. Instruction No. 7/2013 dated 15.07.2013 was issued pursuant to the directions issued by the Delhi High Court in the case of Court On its Own Motion v. Commissioner of Income Tax (supra), that in no case interest u/s 244A of the Act be denied to the assessee where the assessee is not at fault. In the facts of the case, ....
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....ilar benefit to a resident/ deductor who has deducted tax at source and deposited the same before remitting the amount payable to a non-resident/ foreign company. 38. Providing for payment of interest in case of refund of amounts paid as tax or deemed tax or advance tax is a method now statutorily adopted by fiscal legislation to ensure that the aforesaid amount of tax which has been duly paid in prescribed time and provisions in that behalf form part of the recovery machinery provided in a taxing Statute. Refund due and payable to the assessee is debt-owed and payable by the Revenue. The Government, there being no express statutory provision for payment of interest on the refund of excess amount/tax collected by the Revenue, cannot shrug off its apparent obligation to reimburse the deductors lawful monies with the accrued interest for the period of undue retention of such monies. The State having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever mon....