2025 (4) TMI 1083

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.... are independent of, and without prejudice to one another: 1. General 1.1 On the facts and the circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) is erroneous and bad in law. 2. Not allowing compensation for delayed payment of interest. 2.1 The CIT(A) has erred in dismissing the appeal for allowing compensation for the inordinate delay in payment of interest on refund. The compensation calculated up to June 2023 amounts to Rs. 11,40,257. The compensation will be Rs. 17,25,451 calculated up to 31-08-2024. The Appellant prays that directions be given to grant all such relief arising from the rounds of appeal mentioned supra as also all consequential reli....

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....est u/s. 244A(aa) of the I.T. Act in respect of the balance amount refundable to the appellant from the date of payment of tax to the date of grant of refund. However, in my considered opinion there is no provision under the Income Tax Act for allowing compensation for delay in payment of interest on refund. In view of the provision u/s. 244A of the I.T. Act inserted by the Direct Tax Laws (Amendment) Act, 1987 with effect from 01.04.1989, the appellant shall be entitled to receive simple interest on the amount refundable and there is no provision for allowing compensation for delay in payment of interest on refund. This ground of appeal raised by the appellant is therefore dismissed." Now, the assessee is in appeal against the order of ....

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..... The Ld. CIT(A) has dismissed the appeal holding that Section 244A of the Act entitles assessee to receive simple interest on the refund due, but does not provide for compensation for any delay in payment of such interest. The Ld. AR has relied on various case laws. However, we find that none of these case laws are relevant to present case. In the case of CIT vs. H.E.G. Ltd, the Hon'ble Supreme Court has only answered the meaning of the words "refund of any amount becomes due to the assessee" in Section 244A of the Act. The case of Sandvik vs. CIT is relating to A.Y.1977-78 to 19-82-83 prior to insertion of section 244A of the Act for granting interest on refunds, when there was no provision for granting interest for delayed payment of ref....