2019 (1) TMI 1281 - HC - Income Tax

Grant of interest u/s 244A - when the amount of refund became due for the first time because of the order of the appellate authority and was delayed for reasons attributable to the assessee - Held that - The assessee s claim for refund arose out of an order passed by the Commissioner of Income Tax (Appeals) CIT(A) . While giving effect to the CIT(A) order, since the Assessing Officer did not grant the interest under Section 244A of the Act on such refund, the assessee had approached the Commissioner by filing a petition for revision under Section 264 of the Act in which the Commissioner had directed payment of interest. In view of said order of Commissioner, the Revenue could not have argued that the interest was not payable. Appeal is dismissed.

Summary

Issues:
Interest claimed by the assessee under Section 244A of the Income Tax Act, 1961.

Analysis:
The Revenue challenged the judgment of the Income Tax Appellate Tribunal regarding the grant of interest under Section 244A of the Income Tax Act, 1961. The main issue was whether the Assessing Officer was justified in denying the interest to the assessee, citing delays caused by the assessee in the refund process. The Tribunal had directed the Assessing Officer to grant interest from the date the refund became due, despite the delay being attributable to the assessee.

The High Court noted a similar case involving the same assessee in a different assessment year, where the Revenue had raised an identical question challenging the grant of interest under Section 244A. In that case, the High Court had dismissed the Revenue's appeal on 4th January, 2019. This previous judgment set a precedent for the current case.

Furthermore, the assessee's claim for refund stemmed from an order issued by the Commissioner of Income Tax (Appeals). When the Assessing Officer failed to grant interest under Section 244A on the refund, the assessee filed a petition for revision under Section 264 of the Act. The Commissioner, upon reviewing the petition, directed the payment of interest. This decision by the Commissioner prevented the Revenue from arguing against the payment of interest, as it was deemed payable based on the Commissioner's order.

Ultimately, the High Court dismissed the appeal, affirming the Tribunal's decision to grant interest under Section 244A to the assessee. The judgment highlighted the importance of following legal precedents and honoring decisions made by competent authorities within the framework of the Income Tax Act, 1961.