TaxTMI 
TaxTMI 
2025 (6) TMI 2137
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....9th October 2017 claiming a refund of Rs.1,60,47,550/-. Thereafter, a revised return was filed on 31st January 2019 again claiming the aforesaid refund. The return was processed and an intimation under Section 143(1) came to be issued on 14th November 2019 determining the refund together with interest under Section 244A. Such interest was determined at Rs. 25,67,600/-. The same was determined upto 14th November 2019, i.e. upto the date of intimation. 4. Subsequently, an Assessment Order under Section 143(3) dated 24th December 2019 also came to be passed. Again, the returned loss of the Petitioner was accepted. Along with the said order, a computation sheet was issued wherein, refund of Rs. 1,60,47,549/- was determined. Further, interest under Section 244A of the Act was determined at the same figure of Rs. 25,67,600/-. 5. According to the Petitioner, despite the refund having been determined, the same was not released. The Petitioner, therefore, addressed several communications from time to time requesting release of the refund. The Petition refers to letters dated 18th May 2020 and 3rd June 2020 as also several grievances and representations thereafter requesting that the r....
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....s resulting in the refund" refers to the proceedings in which the refund is determined. In the present case, the refund stood determined in the intimation under Section 143(1) dated 14th November 2019 and in the Assessment Order under Section 143(3) dated 24th December 2019. There is no case, nor any finding, that either of these proceedings was delayed on account of any act attributable to the Petitioner. Reliance is placed on the judgment of the Gujarat High Court in Ajanta Manufacturing Ltd. v. Deputy Commissioner of Income-tax reported in [2017] 391 ITR 33 (Guj) and on the judgment of the Bombay High Court in Commissioner of Income-tax-8 v. Melstar Information Technologies Ltd. reported in [2019] 106 taxmann.com 142, as also on Panther Fincap and Management Services (P.) Ltd. v. S. K. Gupta reported in [2025] 181 taxmann.com 57 (Bom.). It is submitted that these decisions clearly hold that unless the proceedings resulting in refund are delayed for reasons attributable to the assessee, interest cannot be denied under Section 244A(2). 10. Thirdly, it is submitted that even on facts no delay can be attributed to the Petitioner. The Petitioner had furnished multiple bank account....
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....utable to the Petitioner. 13. In rejoinder, the Petitioner has pointed out that the reasons recorded in the impugned order are at variance with the actual facts emerging from the record and, more particularly, from the affidavit filed by Shri Sairaj himself. It is submitted that the impugned order proceeds on a simplistic footing that the delay was caused entirely due to incorrect bank details furnished by the Petitioner. However, the affidavit of Shri Sairaj shows a materially different factual position. According to the Petitioner, the chronology disclosed by Shri Sairaj itself demonstrates that upto August 2021, the Jurisdictional Assessing officer ('JAO') had not approved the refund. The refund was first released only in September 2021 and that too to a bank account which was not the bank account selected in the return for the year under consideration. In October 2021, the Petitioner lodged a grievance and pursued re-issue of the refund. Thereafter, a new bank account was validated and was available since March 2022. Yet, according to the CPC, the system continued to initiate refund to another bank account. The Petitioner has also relied upon letters from its bankers stating....
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....e, if the amount of refund is less than ten per cent of the tax as determined under sub-section (1) of section 143 or on regular assessment; (b) in any other case, such interest shall be calculated at the rate of [one-half per cent] for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation. For the purposes of this clause, "date of payment of tax or penalty" means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand." 16. Section 244A(2), which is the only provision under which the Revenue can seek exclusion of any period, reads thus: "(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-section (1) or (1A)] or [(1B)], and where any question arises as to the period to be excluded, it sh....
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....aid to be the reasons for delaying the proceedings which can be attributable to the assessee. Mere fact that the claim came to be granted by the Appellate Commissioner, would not change this position. In essence, what the Commissioner (Appeals) did was to allow a claim which in law, in his opinion, was allowable by the Assessing Officer. In other words, by passing order in appeal, he merely recognized a legal position whereby, the assessee was entitled to claim certain benefits of reduced tax. Surely, the fact that the assessee had filed the appeal which ultimately came to be allowed by the Commissioner, cannot be a reason for delaying the proceedings which can be attributed to the assessee." (emphasis supplied) 19. This Court in Melstar Information Technologies Ltd. (Supra), in paragraphs 3 to 7 held as under: "3. The issue pertains to interest payable to the respondent - assessee under Section 244A of the Income Tax Act, 1961 ("the Act" for short). The Revenue does not dispute either the assessee's claim of refund or that ordinarily under subsection (1) of Section 244A of the Act, such refund would carry interest at statutorily prescribed rate. However, accor....
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....omes 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 manner provided in the Sub Section (1) of Section 244 of the Act. Section 244A(2) provides that in the event the proceeding resulting in refund has been delayed for reasons attributable to the assessee, the said period of delay shall be excluded from the period for which the interest is payable. 9. In this case, the proceeding resulting in the refund cannot be stated to be delayed for reasons attributable to Petitioner. In any event, there is no finding that there was delay in the proceeding resulting in the refund and that delay was attributable to Petitioner. It is true that Petitioner submitted the original advance tax challans for Rs. 7,00,00,000/- on 19th February 2002 after filing the Return of Income and not with the Return of Income filed on 31st October 2001. However, the Petitioner has received intimation accepting the returned loss and granting refund on 28th March 2003, and the Assessment Order itself came to be passed on 30th March 2004. Therefore, the benefit of advance ....
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....nt Order u/s 143(3) was processed on 24-Dec-19 determining refund of Rs. 1,86,15,150/-. As the refund determined is above Rs.1 lakh, same needs to be approved by A.O. On verification of CPC portal, the JAO approved the refund determined vide order u/s.143(3) on 25-Aug-21. During the period from 24.12.2019 to 25.8.2021, the refund determined was on hold awaiting approval of the JAO. 6. After the approval of refund by the A.O., out of refund determined of Rs. 1,86,15,150/-, sum of Rs. 22,86,695/- was adjusted aganist demand of AY 2011-12 and 2015-16 on 09-Sep-21. Net refund of Rs. 1,63,28,455/- was initially released by CPC on 09-Sep-21 but same failed from banker end for the reason "Account has been closed" (Bank A/c: 080320110000148, IFCS: BKID0000803). The banker sent refund failure feed on 30-SEP-21 & a communication was triggered to assessee on 30-SEP-21. 7. For release of refunds, assessee needs to validate the bank account through e-filing portal and nominate particular bank account. Subsequent to closure of Bank A/c: 080320110000148, refund was released to (Bank A/c: 080332100000034, IFCS: BKID0000803) which was the bank account that was nominated by assesse....
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.... 25. Most importantly, the Petitioner has shown that after the refund remained unpaid, it repeatedly filed grievances and letters. The Petitioner also states that various bank accounts were already available and that alternate bank accounts were validated on the portal. There is also a letter from the Petitioner's bankers stating that no refund was received and no such refund was refused by the bank. This chronology leaves no manner of doubt that the Petitioner was diligent and prompt. 26. We are unable to accept the Revenue's broad submission that because some refund attempts failed for bank-related reasons, the entire period of delay must be attributed to the Petitioner. Technology and automated processing are intended to facilitate administration and not to defeat statutory rights. If the system continued to route refund to an incorrect or earlier bank account despite subsequent validation and nomination of another account, that is plainly a system issue. Such system deficiency cannot be held against the Petitioner. Further, if the Department found that automated re-issue was not fructifying despite repeated attempts and grievances, it was always open to it to resort to a ma....
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....opted 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 money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as matter of course." (emphasis supplied) 28. Therefore, even on this count, once the refund was due and remained unpaid for a prolonged period, interest must follow till the date of....