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2016 (9) TMI 951 - HC - Income TaxRefund - interest computation - Held that - When an appeal is allowed and answered the substantial questions against the revenue, it is duty on the revenue to refund the amount within the statutory period as it is referred under Sec. 153 of the Income Tax Act. In the instant case, refunding the amount as per the order of this court and non-considering the representation dated 18.1.2016 vide Annexure-B is contrary to law. It is expected of the Revenue, that they shall not assign any reasons including technical reasons for not complying the provisions of the Act and the orders passed by this Court. It ought to have communicated the petitioner for the delay. This shall be done here afterwards. With these observations, petition stands disposed of, directing the respondents to consider Annexure- B for refund of the amount in the light of the directions issued with in a period of three weeks from today
Issues:
1. Refund of tax paid - Delay in consideration 2. Applicability of Sec.153(5) of the Income Tax Act 3. Interest calculation under Sec.244A(1A) and 244(A) 4. Duty of Revenue to refund within statutory period 5. Non-communication of reasons for delay Analysis: Issue 1: The petitioner challenged an order by the ITAT and the High Court allowed the appeal, directing the refund of tax paid. However, the application for refund was not considered, leading to the petition before the court. Issue 2: The petitioner cited Sec.153(5) of the Income Tax Act, which mandates a three-month period for refund. The respondent's delay in processing the refund was argued to be against the provisions of the Act. Issue 3: The petitioner sought interest on the refunded amount as per Sec.244A(1A) and 244(A), which prescribe initial interest at 3% and subsequent rates. A writ of mandamus was requested for the calculation and payment of interest along with the refund. Issue 4: The court emphasized the duty of the Revenue to refund the amount within the statutory period, as per Sec.135 of the Income Tax Act. Non-compliance with the court's order and failure to consider the refund representation were deemed contrary to the law. Issue 5: The court criticized the Revenue for not communicating reasons for the delay in refunding the amount. It directed the respondents to consider the refund application promptly and refund the amount with statutory interest within three weeks, emphasizing the importance of following court orders and statutory provisions without undue delay or technical excuses.
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