TaxTMI 
TaxTMI 
2023 (12) TMI 1165
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....me Tax Act, 1961 (For short "the Act, 1961"). 3. As the facts are similar 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 deposi....
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....ent, thereafter, exercising powers conferred under section 119(2)(b) of the Act, 1961, by order 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, 18....
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....62. It was, therefore, submitted that when the delay was condoned there was no reason for the Income Tax department 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 pe....
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....spects to condone the delay in filing the return of income for A.Y. 2013-2014 according to the relevant provisions of the Act, 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 fil....
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...., there was no question of issuance of any notice required under section 245 of the Act, 1961, and accordingly, the directions issued by 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....
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....on or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on 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 th....
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....r may deny interest for reasons to be recorded in writing if the assessee was in fault and responsible for the delay. This is the fourth mandamus which we have issued." 3. In view of the direction of the Hon'ble Court, I am directed to convey that in no case should interest u/s 244A 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 followe....
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....f refund after completion of assessment for the same year) can be admitted for condonation provided other conditions as referred above are fulfilled. The powers of acceptance/rejection within the monetary limits delegated to the Pr. CCsIT/CCsIT/Pr.CsJT/CsIT in case of returns claiming refund and supplementary claim of refund would be subject to the following 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 D....
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....eel that the compensation in respect of land belonging to them which had been acquired was agricultural land, and claim refund of the tax which was deducted at source and deposited with the Income Tax Department. On the filing of these returns, the Assessing Officer(s) shall go into the aforesaid question and wherever it is found that the compensation was received in respect of agricultural land, the tax deposited 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 ref....
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....here is corresponding obligation on the revenue to refund such amount with interest in as much as they have retained and enjoyed the money deposited. Even the Department has understood the object behind insertion of Section 244A, as that, an assessee is entitled to payment of interest for money remaining with the Government which would be refunded. There is no reason to restrict the same to an assessee only without extending the similar 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 it....