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2019 (11) TMI 1001 - AT - Income TaxGranting interest on interest on the delayed refund - HELD THAT - Section 244A of the Act governs payment of interest on refund due. This provision of law came on the statute book w.e.f. 1.4.1989. However, section 244 was on the statute book even prior to section 244A. As per this section, the refund was required to be paid within a period of 3 months from the end of the month in which the order is passed in appeal or other proceedings. Assessee has heavily relied upon the judgement of the Hon'ble Supreme Court, which was rendered in the case of CIT Vs. Narendra Doshi 2001 (7) TMI 10 - SUPREME COURT . We find that the controversy regarding claim of interest on interest in respect of the refund due has been decided by the Hon'ble Supreme Court in the case of CIT Vs. Gujarat Flouro Chemicals 2013 (10) TMI 117 - SUPREME COURT . Facts of the case laws as relied by the assessee are clearly distinguishable. As in those cases there was an excess payment of tax and there was inordinate delay by the revenue for making payment for refunding the amount u/s 214 of the Act. But in the present case, admittedly, the claim for refund is crystallized only after decision of the Tribunal and the application is made by the assessee to the CBDT for condonation of delay. Under these undisputed facts, we find no infirmity in to the order of the Ld. CIT(A) rejecting the claim of the assessee. However, before parting, we wish to clarify that from the facts of the present case, it cannot be inferred that delay was solely attributable to the assessee. In our view, the revenue authority should settle the claim of the refund expeditiously to avoid unnecessary litigation and harassment to the tax payer. The grounds raised in this appeal are dismissed.
Issues Involved:
1. Eligibility for interest on interest due to delayed refund. 2. Correctness of the calculation of interest submitted by the assessee. 3. Amendment of grounds of appeal. Issue-wise Detailed Analysis: 1. Eligibility for Interest on Interest Due to Delayed Refund: The primary issue revolves around the assessee's claim for "interest on interest" due to the delay in granting refunds. The assessee argued that the delay was unreasonable and gross, thus entitling them to additional interest as compensation. The CIT(A) dismissed this claim, stating that the delay was primarily on the part of the assessee due to late deposits and procedural delays in seeking condonation from the CBDT. The CIT(A) also referenced the Supreme Court case of CIT vs. Gujarat Fluoro Ltd., which clarified that only statutory interest provided under Section 244A could be claimed, and no additional interest on such statutory interest was permissible. The Tribunal upheld the CIT(A)'s decision, noting that the Supreme Court's ruling in Gujarat Fluoro Ltd. was binding and that the assessee's reliance on the Narendra Doshi and Sandvik Asia cases was misplaced. The Tribunal emphasized that the delay in refund was largely attributable to the assessee's actions, including the late filing of appeals and procedural oversights. 2. Correctness of the Calculation of Interest Submitted by the Assessee: The assessee contested the calculation of interest on the refund, arguing that the Assessing Officer (AO) had erred in not granting interest on the delayed refund. The CIT(A) dismissed this claim, stating that the AO had correctly applied Section 244A, which only provides for interest on the principal amount of the refund and not on the interest itself. The Tribunal supported this view, reiterating that the statutory provisions did not allow for interest on interest. 3. Amendment of Grounds of Appeal: The assessee sought to amend the grounds of appeal to include a claim for additional interest under Section 244A(1A) and compensation for delayed payment. The CIT(A) allowed the amendment but ultimately dismissed the appeal on the merits. The Tribunal noted that while the amendment was permitted, it did not change the outcome as the statutory framework did not support the claim for interest on interest or additional compensation. Conclusion: The Tribunal dismissed all three appeals filed by the assessee, affirming the CIT(A)'s decision that the assessee was not entitled to interest on interest for the delayed refund. The Tribunal emphasized that the statutory provisions under Section 244A only allowed for interest on the principal amount of the refund and did not support additional interest or compensation. The Tribunal also noted that the delay in the refund process was largely attributable to the assessee's actions, including procedural delays and late filings.
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