TaxTMI 
TaxTMI 
2026 (7) TMI 1168
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....ar 2019-20 claiming a refund of Rs. 28,78,09,240/-. The said return was processed under Section 143(1) of the Act on 23rd June 2026 wrongly computing a refund of Rs. 8,58,63,229/- and interest under Section 244A thereon of Rs. 64,39,740/-. The Petitioner filed a Rectification Application dated 8th October 2020 (Exhibit D) submitting that the error in computing the refund and the interest thereon occurred since the Respondents had not considered the taxes paid by Bharat Forge Pvt Ltd., which amalgamated with the Petitioner with effect from 1st April 2018 pursuant to the Orders of the National Company Law Tribunal dated 4th November 2019. The said Rectification Application dated 8th October 2020 (Exhibit D) was allowed by the Respondents vide Order dated 1st July 2021 (Exhibit H). However, in the computation sheet attached to the Order dated 1st July 2021, though the amount of income-tax refund due to the Petitioner was corrected to Rs. 28,78,09,240/- (as claimed in the Return of Income), the interest under Section 244A was incorrectly computed at Rs. 84,59,200/-. On 3rd September 2021, the refund computed as per Order dated 1st July 2021 (Exhibit H) was partially adjusted and the ba....
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....ation u/s 154 of the act stating that less refund was issued. Accordingly, rectification u/s 154 dated 01.07.2021 was carried out and refund of Rs. 20,39,65,469 /- including interest of Rs. 84,59,200/- u/s 244A of the act was issued by CPC. Further, rectification order u/s 154 dated 19/04/2022 was passed. The contents of the same is as follows: - "In this case, order u/s 154 dated 01.07.2021 has been passed assessing total income at Rs. 131,69,52,840/- and determining refund of Rs. 20,39,65,469/- payable to the assessee. The assessee vide its rectification application dated 30.11.2021 has stated that while passing the above order, interest u/s 244A has been short granted. On verification of records, the contention of the assessee is found to be correct. The above, the mistake apparent from records is hereby rectified u/s 154 of the I.T. Act, 1961. The total income remains unchanged as above." During the time of calculation, interest u/s 244A was given by the AO, however the same was aborted by the system. In this regard, the copy of rectification order dated 19/04/2022 alongwith its computation sheet is attached for your reference. Regards, Dy Co....
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.... Application of the Petitioner vide Order dated 19th April 2022 and the only reason given is the inability of the system to process the interest. It is undisputed that interest due to the Petitioner has remained unpaid. The delay in making such payment is admittedly not attributable to the Petitioner. In Capgemini Technology Services India Ltd (supra) we have held as under: "11. Insofar as the relief in paragraph 2(d) is concerned, the interest under Section 244A(1A) of Rs. 7,58,77,348/- for three years combined, though determined on 23.08.2023, has not been paid till date and more than 2 years have elapsed. We are of the view that the Petitioner is entitled to interest even on such delayed payment of interest. Very recently, a Division Bench of this Court in case of Tata Communications Ltd. (supra), following the decision in case of India Trade Promotion Organisation (supra) of the Delhi High Court, has directed the Department to grant interest on delayed payment of interest already determined. The relevant paragraph is quoted as under: "Therefore, though one may call it as interest on interest, in reality payment of interest on the unpaid amount occurs because o....
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....s 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. (emphasis supplied) 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 its apparent obligation to reimburse the deductors lawful monies with t....