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2017 (9) TMI 1971 - AT - Income TaxInterest granted as per Sec. 244A - interest on refund - Whether CIT(A) erred in granting interest upto the date of issuance of refund voucher, i.e. 29.3.2010 whereas as per the assessee, it is entitled to interest upto April, 2010 (i.e. upto the date of receipt of refund voucher on 6.4.2010)? - HELD THAT - We find that in the case of Pfizer Limited, 1991 (3) TMI 121 - BOMBAY HIGH COURT has held that assessee is entitled to interest upto the date of receipt of the refund order. Similarly, our coordinate bench in the case of M/s. Novartis India Limited 2011 (3) TMI 1822 - ITAT MUMBAI has decided a similar issue in favour of the assessee wherein the claim of the assessee for interest was upheld upto the date when the Pay Order is actually received by the assessee pursuant to the order sanctioning the refund . Therefore, following the aforesaid precedents, in our view, the assessee is justified in seeking interest u/s 244A of the Act upto the date of receipt of the refund order, i.e. 6.4.2010. Thus, on this aspect, assessee succeeds.
Issues:
Determining the period for which interest is allowable to the assessee under Sec. 244A of the Income Tax Act, 1961 on the refund due as a result of the Assessing Officer implementing the Tribunal's order. Analysis: The appeal by the assessee challenges the order of CIT(A)-7, Mumbai concerning the Assessment Year 2003-04, stemming from the DCIT-3(3), Mumbai's order under section 143(3) r.w.s. 254 of the Income Tax Act, 1961. The principal issue revolves around the period for which interest is payable to the assessee under Sec. 244A of the Act on the refund due to the assessee post the Assessing Officer's compliance with the Tribunal's order. The Assessing Officer determined a refund amount for the assessee inclusive of interest under Sec. 244A, but the assessee contested that the interest was granted only until the date of the order giving effect, not until the actual receipt of the refund. The CIT(A) held that interest is to be allowed until the date of the refund voucher, not the date of actual receipt by the assessee, rejecting the claim for interest up to the month of April 2010 when the refund was received. The assessee contended that interest should be paid until the date of actual receipt of the refund voucher. The assessee cited various decisions supporting their claim for interest until the date of receipt of the refund voucher. The Revenue defended the CIT(A)'s decision, emphasizing that the interest was allowed until the date of the refund voucher's issuance. The Tribunal found that the assessee is entitled to interest under Sec. 244A of the Act until the date of receipt of the refund order, following precedents like Pfizer Limited case and Novartis India Limited case, where interest was granted until the actual receipt of the refund order. Considering the above, the Tribunal ruled in favor of the assessee, allowing interest under Sec. 244A of the Act until the date of receipt of the refund order. The Tribunal directed the Assessing Officer to re-calculate the interest due to the assessee in line with this decision. Consequently, the appeal of the assessee was allowed. In conclusion, the Tribunal's judgment clarified the period for which interest is payable to the assessee under Sec. 244A of the Income Tax Act, 1961, emphasizing that interest should be granted until the date of receipt of the refund order, not just until the issuance of the refund voucher.
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