TaxTMI 
TaxTMI 
2026 (8) TMI 1266
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....HCL Infosystem Ltd, a company whose hardware division was merged with the assessee. The facts leading to claim the credit of HCL Infosystem Ltd. was that in terms of the scheme of arrangement approved by Hon'ble Delhi High Court vide its order dated 30.10.2013 w.e.f. the appointed date of 01.01.2013, the hardware solution business of HCL Infosystem Ltd. stood transferred to the assessee company. As a result of said order, the company prepared its account for FY 2014-15 relevant to year under appeal including results of hardware solutions business of HCL Infosystem Ltd. In the final account under Note-36, this was fact duly disclosed. The assessee later revised its return of income on 29.03.2017 declaring the same loss and claimed further TDS thus, the total TDS claimed was as under:- (i) INR 8,68,52,930/- is on account of appellant's own name business and (ii) INR 27,30,61,324/- on account of amalgamated business of HCL Infosystem Ltd. 3. The copy of the said ITR is placed at page 3 & 4 of the Paper Book filed before us wherein refund claimed of the gross amount of TDS of both the companies totaling to INR 35,99,14,254/- was appearing. The assessment was comple....
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...."That on the facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) ["CIT(A)"] erred in confirming the action of the assessing officer in denying claim of interest of Rs. 14,03,44,586 under section 244A of the Income-tax Act, 1961 ('the Act') in the rectification order dated 28.06.2024 passed under section 154 of the Act. 1.1. That the CIT(A) erred in not appreciating that the rectification order dated 28.06.2024, passed without granting opportunity of hearing, much less personal hearing is violative of mandate of section 154 of the Act and principles of natural justice. 1.2. That the CIT(A) erred in not directing the assessing officer to grant interest under section 244A(1) of the Act on the amount of refund pertaining to prepaid taxes (TDS credit) of Rs. 35,98,57,914. 1.3. That the CIT(A) erred in not appreciating that the appellant was eligible for interest on refund under section 244A of the Act from the first day of the relevant assessment year till the date of grant of refund i.e., from 01.04.2015 to 04.10.2021. 1.4. That the CIT(A) erred in attributing the delay in processing refund under section 2....
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....ntical circumstances, the Hon'ble Jurisdictional High Court in immediately preceding year in the case of assessee itself vide order reported in 184 taxmann.com 38 has appreciated the fact that scheme of takeover has been approved by the Hon'ble Delhi High Court and the assessee has to recast its books of accounts and thereafter, filed the revised return. During this period, TDS was deducted by the parties in the name of old company i.e. in the name of HCL Infosystem Ltd. and therefore the assessee is entitled for such refund being exceptional circumstances and interest is to be allowed u/s 244A and provision of section 244A(2) of the Act could not be applied. He prayed accordingly. 7. On the other hand, ld. CIT DR supported the orders of the lower authorities and submits that TDS was reflected in 26AS statement of HCL Infosystem Ltd. and it was the fault on the part of assessee of delay in renew the contracts with the respective parties so that to enable them to make TDS in the PAN of the assessee company. This lapse is solely attributable to the assessee and therefore, in terms of section 244A(2) of the Act, lower authorities have rightly denied the interest u/s 244A to the ass....
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....he rectification application filed u/s 154 in terms of order dated 10.09.2021 has allowed the total credit claimed for the TDS of both the companies however interest u/s 244A of the Act was given only for the period of one month i.e. the period from which credit is approved by DGIT(System) to the date of issue of refund. Here it is relevant to state that as observed above, the assessee has claimed credit of TDS of INR 27,30,61,324/- of HCL Infosystem Ltd. Out of which the assessee has claimed credit of INR 15,27,13,858/- in the return of income filed u/s 139(1) and balance was claimed at INR 12,03,47,466/- was claimed in the revised return filed on 29.03.2017. Thus, the assessee has claimed full credit of TDS related to the income pertaining to the HCL Infosystem Ltd. in two [02] trenches (i) of INR 15,27,13,858/- on 28.11.2015 through original return and (ii) balance of INR 12,03,47,466/- on 29.03.2017 through revised return. Therefore, the entire TDS credit of HCL Infosystem Ltd. was claimed by the assessee in accordance with law. It is also a matter of fact that no credit of this TDS was claimed ever by HCL Infosystem Ltd. Separately and entire credit was allowed to the assessee....
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....son and not to the deductee : Provided that the deductee files a declaration with the deductor and the deductor reports the tax deduction in the name of the other person in the information relating to deduction of tax referred to in sub-rule (1). (ii) The declaration filed by the deductee under clause (i) shall contain the name, address, permanent account number of the person to whom credit is to be given, payment or credit in relation to which credit is to be given and reasons for giving credit to such person. (iii) The deductor shall issue the certificate for deduction of tax at source in the name of the person in whose name credit is shown in the information relating to deduction of tax referred to in sub-rule (1) and shall keep the declaration in his safe custody. (3) (i) Credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable. (ii) Where tax has been deducted at source and paid to the Central Government and the income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportio....
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....ealed the income on which the TDS of INR 27,30,61,324/- was deducted in the PAN of erstwhile merged entity HCL Infosystem Ltd. who never claimed credit of such TDS therefore, it was the duty of AO to allow the credit of such TDS in accordance with law alongwith interest u/s 244A of the Act to the assessee company. Alleging that the delay was attributed to the assessee is patently incorrect. The Hon'ble Delhi High Court in the case of assessee itself stated supra, considering these facts, has made following observations:- 35. "According to us, if a natural meaning is given to sub-section (2) of Section 244A, it is clear that an assessee is entitled for interest under Section 244A of the Act of 1961 as a matter of course and it is only in exceptional circumstances that the same can be denied in the event of the assessee himself being in default or remaining at fault. 36. Looking at the language used in sub-section (2) of Section 244A of the Act of 1961, we are of the firm opinion that in case, the Assessing Officer is of the view that the delay in processing the request for refund has been caused for reasons attributable to the assessee, it is "Principal Chief Commi....