2000 (10) TMI 172 - AT - Income Tax

Summary

Issues:
- Entitlement to interest under section 244A of the Income-tax Act, 1961 for excess payment of advance tax.

Analysis:
1. The appeal was filed against the order rejecting the application under section 154 of the Income-tax Act, 1961, where the appellant claimed entitlement to interest under section 244A. The Assessing Officer had rejected the application stating that the payment was made in a TDS challan and only the ITO TDS had the authority to refund the excess payment of TDS. The CIT(A) observed that the delay in refund was due to the assessee's fault for using the wrong challan, thus denying interest under section 244A.

2. The CIT(A) directed the Assessing Officer to verify the payment details with the ITO TDS, who confirmed the advance tax payment made by the assessee. The Assessing Officer then ordered a refund but refused to grant interest under section 244A, attributing the delay to the assessee's error in using the wrong challan. The CIT(A) upheld the decision, stating that the delay was the assessee's fault, hence not entitled to interest under section 244A.

3. The assessee contended that the payment of advance tax was correct, even though made in a TDS challan. The forms for tax payments are non-statutory and meant for taxpayer convenience. The assessee argued that the excess payment of advance tax entitles them to interest under section 244A. The Departmental Authorities, however, supported the denial of interest, attributing the delay to the assessee's mistake in using the wrong challan.

4. The Tribunal analyzed section 244A of the Income-tax Act, which entitles the assessee to interest on the refund due. Since no statutory form is prescribed for tax payments, using a non-statutory form like Challan No. 2 for TDS does not deprive the assessee of interest on the excess advance tax payment. The Tribunal held that the assessee is entitled to the refund along with interest under section 244A, directing the Assessing Officer to allow the interest claim.

5. In conclusion, the Tribunal allowed the appeal, emphasizing that the assessee is entitled to interest under section 244A for the excess payment of advance tax, even if made using a form meant for TDS. The Tribunal highlighted that non-statutory forms are for taxpayer convenience and do not negate the assessee's right to interest on the excess tax payment.