TaxTMI 
TaxTMI 
2026 (9) TMI 257
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....der section 90. In the said return, capital gains arising from the sale of 19 flats, amounting to approximately Rs.49.65 crore, were offered to tax at the rate of 30%, treating the same as short-term capital gains by virtue of section 50. The assessee had paid advance tax of Rs.63 crore and had also claimed substantial TDS credit. A revised return was filed on 28.03.2014 for claiming additional TDS credit; however, no revision was made with regard to the rate applicable to the capital gains. During the course of scrutiny proceedings, the assessee, vide letter dated 28.03.2016, raised a claim that notwithstanding the deeming fiction contained in section 50, the flats were long-term capital assets and, therefore, the capital gains should be subjected to tax at the rate of 20% under section 112 instead of 30%. The assessment was completed under section 143(3) read with section 144C(4) on 29.04.2016 at a total income of Rs.203,43,63,072, without adjudicating the aforesaid claim. 3. In the first round of appeal, the learned CIT(A), vide order dated 05.09.2018, directed the Assessing Officer to verify whether the claim had been raised during the assessment proceedings and, if so, to d....
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....or the failure to file a revised return constitutes a statutory ground for rejecting interest. Reliance was placed upon the judgments of the Hon'ble jurisdictional High Court in Chetan N. Shah v. M.K. Moghe, CIT [2015] 53 taxmann.com 18 (Bom) and PCIT v. State Bank of India [2019] 102 taxmann.com 339/[2019] 261 Taxman 409 (Bom), besides the judgment of the Hon'ble Gujarat High Court in Ajanta Manufacturing Ltd. v. DCIT [2017] 391 ITR 33 (Guj). Insofar as additional interest under section 244A(1A) is concerned, the learned counsel submitted that the separate refund of Rs.90,94,381 arose from the appellate order dated 05.09.2018, received on 09.10.2018, but was actually paid only on 02.03.2021. Therefore, additional interest at 3% per annum was payable from the day following the expiry of the period prescribed under section 153(5) until the date of actual refund. The learned DR, on the other hand, strongly relied upon the impugned order and submitted that the refund arose solely because the assessee subsequently departed from the position consciously adopted in its return and succeeded only in the appellate proceedings. 6. We have heard the rival submissions and perused the releva....
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.... the assessee had itself offered interest income in the return but contended during assessment that such income had not accrued. The claim was rejected by the Assessing Officer and accepted only in appeal. The Assessing Officer sought to grant interest merely from the date of the appellate order. The Hon'ble High Court rejected this approach and upheld the grant of interest from the beginning of the relevant assessment year, holding that there was no material to suggest that the assessee had delayed the proceedings resulting in the refund. The Court held that raising a claim during the assessment and succeeding upon it in appeal did not constitute delay attributable to the assessee. Similarly, the Hon'ble Gujarat High Court in Ajanta Manufacturing Ltd. v. DCIT (supra) held that revising a return, raising a claim during assessment or succeeding in appellate proceedings cannot, without something further, be treated as delay attributable to the assessee. Unless the assessee is shown to have needlessly or frivolously prolonged the proceedings, the mere fact that relief was eventually obtained at the appellate stage does not attract section 244A(2). 9. Examined in light of the afores....
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....v. Tata Chemicals Ltd. [2014] 363 ITR 658 (SC) explained that once tax becomes refundable, the obligation to refund carries with it the statutory liability to pay interest for the period during which the money remained with the Revenue. 12. There is yet another infirmity in the impugned reasoning. Section 244A(2) permits exclusion only of the particular period for which the proceedings resulting in refund were delayed for reasons attributable to the assessee. It further provides that where a question arises regarding the period to be excluded, the matter is to be decided by the prescribed higher authority, whose decision thereon is final. In the present case, the Assessing Officer neither made the statutory reference nor identified any definite period of delay. The entire interest was rejected on the broad premise that the assessee had originally adopted a higher rate. Even the learned CIT(A) has neither identified any particular act which delayed the proceedings nor quantified the corresponding period. A provision authorising exclusion of a demonstrably attributable period cannot be employed to deny statutory interest in its entirety. 13. We accordingly hold that the assesse....