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Issues involved: The judgment deals with the entitlement of interest on the amount refunded to the petitioner by the Delhi Development Authority, following a dispute regarding tax deduction at source under section 194A of the Income Tax Act.
Summary: The Delhi Development Authority undertook construction of flats and allotted them to buyers. The Income-tax Officer raised a demand for non-deduction of tax at source, leading to a recovery from the Authority. Upon appeal, the Tribunal held that no tax deduction was required, ordering a refund to the Authority. Subsequently, a writ petition was filed seeking interest on the refunded amount. During the proceedings, the respondent calculated and refunded the principal amount along with interest. A subsequent application by the petitioner contested the interest calculation, leading to a legal dispute. The respondent opposed the claim, arguing that the principal amount and interest had already been paid as per law. The court analyzed relevant sections of the Income Tax Act, determining the petitioner as an assessee and the recovered amount as part of an assessment order. It held that the petitioner was entitled to interest under sections 244 and 244A, as the respondent had failed to pay the due interest despite demands. Consequently, the court allowed the application, directing the respondent to calculate and release the interest amount to the petitioner within a specified period. Failure to comply would result in additional interest liability on the respondent. No costs were awarded in the judgment.
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