AI Drafter 
TaxTMI 
TaxTMI 
2025 (8) TMI 736
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.... order passed by Ld. CIT(A) is bad in law. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the order of Ld. AO wherein Ld. AO has granted short interest under Section 244A of the Act. 3. That on the facts and circumstances of the case and in law, the interest is not computed in the manner prescribed u/s Section 244A of the Act. 4. On the facts and circumstances of the case and in law, the refund earlier granted should firstly be adjusted against the interest amount due and then the residual refund should be adjusted against the principal amount. Thereafter, the interest should be computed u/s 244A on the remaining principal amount of refund. However, the Ld. AO....
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....erest. 5. Subsequently, the assessee filed rectification application along with the calculation sheet before the Ld. AO for grant of correct interest under Section 244A. On the basis of this application, rectification order dated 24.02.2021 u/s 154 of the Act was passed granting refund, but no further interest on the refund of Rs. 1,09,49,754/- was granted. And this order of AO was upheld by CIT(A) as well. 6. Now Before me, the Ld. AR submitted that this issue is squarely covered by various decisions of the Courts including that of ITAT in the case of M/s Indian Aluminum Co. Ltd Vs. DCIT ITA No. 236/Mum/2016 for the A.Y 1995-96 decided on 30.10.2019. Apart from the above the Ld. AR drawn my attention to the findings of Hon'ble High C....
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.... seen that the Hon'ble High Court after detail analysis and discussion has held that, when the revenue does not pay full amount of refund, but part of amount is paid, they will be liable to pay interest on the balance outstanding amount, which consist, of tax paid on the interest, which is payable till the payment of the part amount and interest payable on the principal amount, which remained outstanding thereafter. The Hon'ble High Court after analyzing the various decisions and also the relevant section 244A, had observed and held as under:- "The words used in section 244A are "where refund of any amount becomes due and payable to the assessee under the Act", the assessee shall be entitled to receive in addition to the sa....
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.... us to understand what is due and payable under section 244A of the Act. Suppose the Revenue is liable to refund Rs. 1 lakh to an assessee with effect from April 1, 2010, the said amount is refunded along with interest due and payable under section 244A on March 31, 2013, then no further interest is payable. However, if only Rs. 1 lakh is refunded by the Revenue on March 31, 2013, and the interest accrued on Rs. 1 lakh under section 244A is not refunded, the Revenue would be liable to pay interest on the amount due and payable but not refunded. Interest will not be due and payable on the amount refunded but only on the amount which remains unpaid, ie, the interest element, which should have been refunded but is not paid. In another situatio....
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....nd makes part payment of the amount refundable. The aforesaid interpretation also ensures that the Assessing Officer/Revenue refund the entire amount, which is due and payable, including interest payable under section 244A. It discourages part payment. There is no other provision under the Act under which an Assessing Officer/Revenue can be made liable to pay interest when part payment is made and the entire amount, which is refundable is not paid to the assessee. Otherwise the Assessing Officer/Revenue can refund the principal amount and not pay the interest component under section 244A for an unlimited period with impunity and without any sanction, which would amount to granting premium to a non-compliance with law." Thus, respec....