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2018 (9) TMI 351 - HC - Income TaxInterest on the refund granted - date from which interest on refund amount to be awarded i.e, either from the date of exemption or from the date of the application - Held that - The respondent authorities have to decide from which date the petitioner - assessee is entitled for interest on the refund amount in view of the exemption granted by the Tribunal as long back on 28.9.2007 (Annexure-C) though the application filed on 27.3.2006 (Annexure-A). All these aspects are not considered by Respondent Nos.1 and 2. It is also relevant to state at this stage that in view of Sections 244A(1), 244A(2), 244(1A) and 153 and other relevant provisions of the Act, the Prl. Chief Commissioner or the Commissioner is the final authority to decide regarding the date from which interest on refund to be granted. In all these writ petitions, order of refund to the assessee is not at all challenged by the Revenue. There is no dispute with regard to the refund amount to the assessee. The order of refund is final. The dispute is only with regard to the date from which interest on refund amount to be awarded i.e, either from the date of exemption or from the date of the application. The same has not been considered by the authorities below. For the reasons stated above, the writ petitions are allowed. The impugned orders dated 27.5.2011 passed by the 2nd respondent declining to award interest on refund as per Annexure-F and consequential Revision Order dated 26.3.2014 passed by the 1st respondent as per Annexure-G, in all these writ petitions are hereby quashed. The matters are remanded to the 2nd respondent - Assistant Commissioner of Income Tax for re-adjudication
Issues:
- Refusal to award interest on refund - Interpretation of Section 244A(2) of the Income Tax Act Refusal to award interest on refund: The petitioner, a Trust owned by the Government of India, filed writ petitions seeking to quash an order declining to award interest on the refund granted by the Assessing Officer. The petitioner's income was exempted under Section 10(20) of the Income Tax Act until 31.3.2003. After filing an application under Section 12A of the Act, the Commissioner of Income Tax rejected it, leading to an appeal before the Income Tax Appellate Tribunal. The Tribunal allowed the appeal, granting registration under Section 12A w.e.f. 1.4.2003. This decision was upheld by the High Court. Despite this, the Assessing Officer granted a refund but denied interest citing Section 244A(2) of the Act. The Commissioner of Income Tax, in a revision order, upheld the decision. The petitioner contended that the refusal to award interest was erroneous and illegal, emphasizing that the delay was not solely attributable to them. The petitioner argued that relevant provisions of the Act were not considered properly, and the authorities failed to interpret Section 244A(2) accurately. Interpretation of Section 244A(2) of the Income Tax Act: The petitioner's counsel argued that the authorities did not consider the delay caused by the revenue and failed to involve the Prl. Chief Commissioner or Commissioner in deciding on interest payment. The petitioner highlighted Sections 244A(1), 244A(2), 244(1A), and 153 of the Act, stating that the correct interpretation of interest payment should involve higher authorities. The petitioner stressed that the orders granting exemption by the Tribunal and the High Court were not taken into account while deciding on interest payment. The Court noted that the authorities did not properly consider the material facts and relevant provisions of the Act. Consequently, the Court allowed the writ petitions, quashed the orders refusing interest on the refund, and remanded the matters to the Assistant Commissioner of Income Tax for re-adjudication based on the orders passed by the Commissioner of Income Tax and the relevant provisions of the Income Tax Act. This detailed analysis of the judgment addresses the issues of refusal to award interest on the refund and the interpretation of Section 244A(2) of the Income Tax Act, providing a comprehensive overview of the legal proceedings and decisions involved.
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