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2017 (6) TMI 866 - AT - Income TaxNon granting of interest on the tax deducted at source u/s 244A(a) - assessee contented in the proceedings U/s.154 interest should be granted right from first April 2004 till the date of passing the order - whether no claim of exemption U/s.10(10C)in the original return of income? - Held that - As in the case of Tata Chemical Limited 2014 2014 (3) TMI 610 - SUPREME COURT held that. 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 the accrued interest for the period of undue retention of such monies. The State having received the money without right and having retained and used it is bound to make the party good just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. In View of the above it is settled that if a resident deductor is entitled for the refund of tax deposited under Section 195 then it has to be refunded with interest under section 244A of the Act. from the date of payment of such tax.
Issues:
Delay in filing the appeal, Granting of interest on tax deducted at source, Interpretation of Section 244A of the Act, Applicability of circular No.11/2016 of the CBDT. Delay in filing the appeal: The appeal was filed with a delay of 156 days, citing the reluctance of the Chartered Accountant to file due to meager interest claim and the appellant being a senior citizen in a remote location. The tribunal condoned the delay, emphasizing that when the merits favor the assessee, the appeal should not be dismissed solely due to filing delay. The decision was supported by legal precedents, including "Collector Land acquisition vs. Mst. Katiji & Others" and "Maniben Devraj Shah vs. Municipal Corporation of Brihan Mumbai." Granting of interest on tax deducted at source: The crux of the issue was the denial of interest on tax deducted at source under Section 244A(a) of the Act. The appellant, an ex-employee of ICICI bank, filed a return for the assessment year 2004-05, claiming exemption under Section 10(10C) of the Act. The assessing officer granted a refund with interest, but the appellant contended that interest should be calculated from April 1, 2004. The claim was rejected as the exemption was not initially claimed in the return, leading to the denial of interest. Interpretation of Section 244A of the Act: The CIT(A) upheld the AO's decision, stating that the delay in the refund claim was the appellant's fault, not the department's. The CIT(A) highlighted that Section 244A(2) allows for the exclusion of interest if the delay is on the assessee's part. The appellant's failure to claim exemption in the original return led to the denial of interest, with the CIT(A) emphasizing the need to follow the specific provisions of the Act and seek remedies through the designated authorities. Applicability of circular No.11/2016 of the CBDT: The appellant cited Circular No.11/2016 of the CBDT, directing revenue authorities to grant interest on tax deducted from the beginning of the assessment year until the refund date. The tribunal noted the circular's directive aligning with the Supreme Court's decision in the Tata Chemicals case, emphasizing the obligation to refund excess tax with interest. The tribunal upheld the circular's guidance, highlighting the settled principle that interest must be paid on refunds of tax deposited under Section 195 of the Act. In conclusion, the tribunal considered the delay in filing the appeal, the denial of interest on tax deducted at source, the interpretation of Section 244A, and the applicability of circular No.11/2016 of the CBDT. The decision was based on legal precedents, statutory provisions, and circular directives, ensuring a comprehensive analysis of the issues involved in the judgment.
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