TaxTMI 
TaxTMI 
2024 (3) TMI 1223
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....to the passing of an assessment order under Section 143(3) read with Section 144C of the Act. Aggrieved by the said order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) ["CIT(A)"] and the CIT(A) passed an order on 24 May 2019, partly allowing the said appeal, giving rise to a refund of certain amounts alongwith statutory interest in favour of the assessee. 4. Thereafter, on 23 December 2020, the AO passed an appeal effect order, whereby, refund with admissible interest under Section 244A(1) of the Act was granted to the assessee. Additionally, an intimation under Section 245 of the Act was also issued by the Revenue, wherein, the amounts of determined refunds were proposed to be adjusted against the demands pending against the assessee for the subsequent AYs. 5. Aggrieved by the said intimation, the assessee sent a letter dated 15 January 2021 to the Revenue highlighting the correct computation of the refund amount due, including the interest under Sections 244A(1) and 244A(1A) of the Act. It is further stated that the assessee, vide its letter dated 06 April 2021, approached the Central Board of Direct Taxes ["CBDT"] apprising the inherent infi....
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....vide order dated 19 May 2022, assessee had already been granted interest in accordance with Section 244A(1) of the Act. He further submitted that due to non-functionality of the Income Tax Business Application ["ITBA"] portal to take up the case of the assessee in view of the amalgamation of the assessee, additional interest under Section 244A(1A) could not be granted. He further contends that since there was the COVID-19 outbreak and the Department was working remotely, the ITBA portal could not be fixed and thus, refund could not be initiated. 11. While justifying the reasons for disallowing the additional interest as enumerated in the impugned order, he further submitted that since the delay for non-issuance of refund is attributable to the assessee, therefore, the additional interest under Section 244A(1A) of the Act cannot be granted to the assessee in light of the mandate as prescribed under Section 244A(2) of the Act. He sought to draw the attention of the Court on the scope of invocation of equity jurisdiction of the Court under Article 226 of the Constitution. 12. We have heard learned counsels appearing on behalf of the parties and perused the record. 13. The short con....
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....** (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 interest is payable [under sub-sections (1) or (1-A) [or (1-B)]], and where any question arises as to the period to be excluded, it shall be decided by the [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner] whose decision thereon shall be final. " 16. Thus, the reasons for non-issuance of the refund alongwith additional interest which is statutorily prescribed under Section 244A(1A) of the Act should be weighed on the anvil that those reasons are attributable to the assessee or not. 17. In light of this, we proceed to examine the rationale as provided by the Revenue for denial of the additional interest in the impugned order. The impugned order records the following reasons for justifying the denial of additional interest which are culled out as under:- "3.0 In this regard, it is again mentioned that, CIT(A) order was received in this office on 26.06.2019. Aggrieved by the o....
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....for reasons attributable to the assessee whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable [under sub-section (1) of (1A)] [or (1B)], and where any question arises as to the period to be excluded, it shall be decided by the [Pr. Chief Commissioner or] Chief Commissioner or [Pr Commissioner or] Commissioner whose decision thereon shall be final". 8.0 In view of the above, it may thus be seen that the delay was attributable to amalgamation of Assessee Company, non availability of functionality and prevailing Covid-19 situation. Considering the above stated facts, since there is no deliberate delay to issue the refund, the additional interest in terms of section 244A(1A) of the Act is not applicable. 9.0 It may further be mentioned that interest u/s 244A(1) was duly provided till the date of issue of refund. As regards interest u/s. 244A(1A), approval of Pr.CIT-4, Delhi has been obtained u/s. 244A(2) to reject the same." 18. A perusal of the same and the submissions on behalf of the Revenue would reflect that the denial of additional interest is based on the aforementioned reasons namely, amal....
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....e behind the introduction of Section 244A of the Act. It is discernible that the objects and reasons for introduction of Section 244A of the Act was clarified by the CBDT in its Circular No. 549 dated 31 October 1989. The relevant paragraphs of the said Circular are reproduced as under:- "11.2 Insertion of a new Section 244-A in lieu of Sections 214, 243 and 244-under the provisions of Section 214, interest was payable to the assessees on any excess advance tax paid by him in a financial year from the 1st day of April next following the said financial year to the date of regular assessment. In case the refund was not granted within three months from the date of the month in which the regular assessment was completed, Section 243 provided for further payment of interest. Under Section 244, interest was payable to the assessee for delay in payment of refund as a result of an order passed in appeal, etc., from the date following after the expiry of three months from the end of the month in which such order was passed to the date on which refund was granted. The rate of interest under all the three sections was 15% per annum. 11.3. These provisions, apart from being complicated lef....
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....e to assessments before 1-4-1989, albeit with clarity of application as contained in Section 244-A. 31. The Department has also issued circular clarifying the purpose and object of introducing Section 244-A of the Act to replace Sections 214, 243 and 244 of the Act. It is clarified therein, that, since there was some lacunae in the earlier provisions with regard to non-payment of interest by the Revenue to the assessee for the money remaining with the Government, the said section is introduced for payment of interest by the Department for delay in grant of refunds. A general right (sic duty) exists in the State to refund any tax collected for its purpose, and a corresponding right exists to refund to individuals any sum paid by them as taxes which are found to have been wrongfully exacted or are believed to be, for any reason, inequitable. The statutory obligation to refund carried with it the right to interest also. This is true in the case of the assessee under the Act." 24. The next prong of the Revenue's submission is that due to the prevailing COVID-19 pandemic at the relevant time, whereby, the employees of the department were working remotely and in limited capacity, prin....