2020 (7) TMI 499 - AT - Income Tax

Entitlement for interest u/s. 244(1A) on the refund - whether the assessee is entitled for interest u/s.244 for the period 29/10/2013 to 22/11/2017? - HELD THAT - It is not in dispute that the entire taxes were ultimately paid by the assessee on 29/10/2013 either by way of physical payment or by way of adjustment of refund as narrated hereinabove. We find that while giving effect to the order of the Tribunal order in the proceedings dated 21/11/2017 passed by the ld. AO the ld. AO had finally determined the refund which was ultimately adjusted against the demand of A.Y.2009-10. This is a case of assessee seeking interest on the taxes actually paid by him which ultimately resulted in refund vide proceedings dated 21/11/2017. This is not a case of assessee claiming interest on interest. Hence we direct the ld. AO to grant interest u/s.244 for the period 29/10/2013 to 21/11/2017. Accordingly the ground No.2 raised by the assessee is allowed. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT - Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited 2020 (5) TMI 359 - ITAT MUMBAI .

Summary

Issues Involved:
1. Entitlement of the assessee to interest under Section 244(1A) of the Income Tax Act, 1961 on a refund amount for a specified period.

Issue-wise Detailed Analysis:

Entitlement to Interest under Section 244(1A):
The core issue in this appeal was whether the assessee was entitled to interest under Section 244(1A) of the Income Tax Act, 1961 on the refund amount of Rs. 23,91,54,333 for the period from 29/10/2013 to 21/11/2017. The Tribunal reviewed the sequence of events and relevant dates, noting that the final order giving effect to the Tribunal's decision was passed on 21/11/2017. The Tribunal observed that the taxes were paid by the assessee on 29/10/2013, either through physical payment or adjustment of refund.

The Tribunal concluded that since the refund was ultimately determined and adjusted against the demand for the assessment year 2009-10, the assessee was entitled to interest on the taxes paid from 29/10/2013 to 21/11/2017. The Tribunal emphasized that this was not a case of the assessee claiming interest on interest but rather on the taxes actually paid. Consequently, the Tribunal directed the Assessing Officer (AO) to grant interest under Section 244 of the Act for the specified period, thereby allowing the assessee's appeal on this ground.

Procedural Issue Regarding Pronouncement of Order Beyond 90 Days:
The Tribunal addressed a procedural issue concerning the pronouncement of the order beyond 90 days from the conclusion of the hearing. The Tribunal referred to a precedent set by the co-ordinate bench in the case of JSW Ltd, which allowed for the extension of the pronouncement period due to the COVID-19 lockdown. The Tribunal noted that the lockdown and resulting disruptions were extraordinary circumstances that justified extending the pronouncement period beyond the standard 90 days. The Tribunal cited the Hon'ble Supreme Court and Bombay High Court's orders extending limitations due to the pandemic, reinforcing that the lockdown period could not be treated as ordinary.

The Tribunal concluded that the period during which the lockdown was in force should be excluded from the 90-day limit for pronouncement of orders, in line with Rule 34(5) of the Income Tax Appellate Tribunal Rules, 1963. The Tribunal thus pronounced the order beyond the 90-day period, considering the exceptional circumstances.

General Grounds:
The Tribunal noted that the first ground raised by the assessee was general in nature and did not require specific adjudication.

Conclusion:
The appeal of the assessee was allowed, directing the AO to grant interest under Section 244 of the Act for the period from 29/10/2013 to 21/11/2017. The Tribunal pronounced the order beyond the 90-day period due to the exceptional circumstances of the COVID-19 lockdown, following the judicial precedent. The order was pronounced as per Rule 34(5) of the ITAT Rules and placed on the notice board on 08/07/2020.