2016 (1) TMI 754 - AT - Income Tax

Grant of interest u/s 244A - refund due to the assessee company on account of Tax deducted at source(TDS) being excess of the tax payable by the assessee company on income computed as per the Income Tax Act,1961 against which the TDS certificates were not filed by the assessee company - Held that - Hon ble Bombay High Court in the case of Larsen & Toubro Ltd. (2010 (6) TMI 414 - Bombay High Court ) has categorically held that the assesse is entitled to interest on TDS due to the assessee even if the TDS certificates have been filed late if the tax was deducted and deposited with the exchequer in time, the interest has to be granted to the assessee from 1st day of assessment year in accordance with Section 244A of the Act and not from the date of filing of TDS certificates with the Revenue. The facts in the instant appeal before us are identical to the facts before Hon ble Bombay High Court in the case of Larsen and Toubro Limited(supra) and the Revenue has not contradicted the same before us. Respectfully following the same, we reject the contentions of the Revenue and dismiss this appeal by directing the AO to grant interest on refund due to the assessee company on account of excess TDS claim wef 01- 04-2004 and not from the date of submissions of TDS certificates by the assessee company - Decided in favour of assessee.

Summary

Issues: Grant of interest under Section 244A of the Income Tax Act, 1961 on excess TDS claim.

Analysis:
1. The appeal concerns the grant of interest by the assessing officer under Section 244A of the Income Tax Act, 1961 on the refund due to the assessee company for the assessment year 2004-05. The assessing officer had ordered the grant of interest on the TDS amount from the date of submission of TDS certificates and indemnity bond by the assessee company on 15-12-2006, rather than from the 1st day of the assessment year. The CIT(A) accepted the assessee's claim that interest should be granted from the 1st day of the assessment year as per Section 244A of the Act, despite the delay in filing the TDS certificates. The CIT(A) relied on a decision of the Bombay High Court in a similar case.

2. Both parties agreed that the issue was covered by the Bombay High Court's decision in Larsen & Toubro Ltd. case, where it was held that interest on TDS should be granted to the assessee from the 1st day of the assessment year, even if TDS certificates were filed late. The Tribunal found the facts in the current appeal to be identical to the Larsen & Toubro Ltd. case and ruled in favor of the assessee, directing the assessing officer to grant interest on the excess TDS claim from 01-04-2004, in line with the High Court's decision.

3. The Tribunal emphasized that if tax was deducted and deposited in time, the assessee is entitled to interest on TDS, as per Section 244A of the Act, from the 1st day of the assessment year. The Tribunal rejected the Revenue's contentions and dismissed the appeal, ordering the assessing officer to grant interest on the excess TDS claim from the beginning of the assessment year, in accordance with the decision of the Bombay High Court in Larsen & Toubro Ltd. case.

In conclusion, the Tribunal upheld the assessee's entitlement to interest on the excess TDS claim from the 1st day of the assessment year, following the precedent set by the Bombay High Court in a similar case.