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2024 (10) TMI 518 - AT - Income TaxAdditional interest claim u/s 244A - claim rejected as assessee had failed to prove that TDS was deducted and paid to the Govt. - as argued AO himself had granted interest u/s. 244A for a particular period and hence, the assessee was not required to prove that the TDS was deducted and paid to the Govt.- HELD THAT - As per the provision, the interest u/sec. 244A has to be calculated from 1st April at the rate of 6% p.a. which is the rate prescribed u/sec. 244A. Thus, matter should be remitted to the file of the NFAC for de novo adjudication considering the documents on record and the judgment of the Hon'ble jurisdictional High Court placed on record and come out with a speaking order as per law complying with the principles of natural justice. Assessee also relied on the decision of Koninklijke Philips N.V. 2023 (1) TMI 1198 - ITAT KOLKATA wherein it was held that interest u/sec. 244A has to be granted up to the date when the actual refund was received. The NFAC shall take cognizance of this proposition while deciding the matter. We set aside the order of NFAC and remand the matter back to its file as per our afore stated directions. The grounds of appeal stands allowed for statistical purposes.
Issues:
1. Grant of interest u/s 244A by the Assessing Officer. 2. Disallowance of interest u/s 244A by the CIT(A). 3. Calculation of interest u/s 244A from the date of filing the return. 4. Levying of interest u/s 234D. 5. Rectification application filed by the assessee. Analysis: Issue 1: Grant of interest u/s 244A by the Assessing Officer The assessee, a charitable trust, filed for exemption u/sec. 11 of the Act, claiming a refund. The Assessing Officer (AO) granted interest u/s 244A in the intimation u/sec. 143(1) from 01/04/2018 to 16/11/2019. However, in the assessment order u/sec. 143(3), the interest was reworked, leading to excess interest granted and the levy of interest u/s 234D. The AO rejected the rectification application filed by the assessee concerning the interest calculation. Issue 2: Disallowance of interest u/s 244A by the CIT(A) The CIT(A) disallowed the claim for additional interest u/s 244A, stating that TDS deduction proof was lacking. The CIT(A) erred in not appreciating that the TDS amount was accepted by the AO, and the interest was granted based on this amount. The CIT(A) also failed to consider that interest u/s 244A should have been allowed from the first day of the assessment year. Issue 3: Calculation of interest u/s 244A from the date of filing the return The contention arose regarding the calculation of interest u/s 244A from the date of filing the return. The assessee argued that interest should be calculated from 01/04/2018, as the return was filed within the extended due date prescribed by CBDT circular, thus making them eligible for interest from the beginning of the assessment year. Issue 4: Levying of interest u/s 234D The AO levied interest u/s 234D in the assessment order, which was a point of contention for the assessee. The assessee filed a rectification application, challenging the interest calculation under this section. Issue 5: Rectification application filed by the assessee The assessee filed a rectification application u/sec. 154, contesting the interest calculation under u/s 244A and u/s 234D. The AO rejected this application, leading to further dispute regarding the correct calculation of interest owed to the assessee. In conclusion, the Appellate Tribunal found in favor of the assessee, setting aside the order of the NFAC and remanding the matter for a fresh adjudication considering the documents on record and relevant legal precedents. The Tribunal emphasized the need for a detailed examination of the facts and compliance with legal principles, directing the NFAC to issue a speaking order in accordance with the law and principles of natural justice.
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