2021 (2) TMI 331 - HC - Income Tax

Interest on the refund amount u/s 244A - Petitioner is aggrieved and has again approached this Court contending that under Section 244A of the Act, interest for the period from 1st December, 2019 to 31st August, 2020 has still not been granted - As argued there is no statutory remedy under the Act for availing this relief - HELD THAT - We would not like to keep the present petition pending and accordingly we direct the Respondent to look into the matter and process the request for interest on the refund amount under Section 244A within a period of four weeks from today. In case within the aforesaid period the Revenue comes to a conclusion that interest is not due or payable to the Petitioner, the same would be communicated by way of a speaking order to the Petitioner. Petitioner shall thereafter be at liberty to avail its remedy against such an order.

Summary

Issues:
1. Refund withholding under Section 241A of the Income Tax Act, 1961.
2. Non-grant of interest under Section 244A of the Act.

Analysis:
1. The petitioner initially challenged an order withholding a refund of &8377;1,57,83,688/- under Section 241A of the Income Tax Act, 1961. The court set aside the order and directed the respondents to re-consider the withholding of the refund amount. The court granted three weeks for this re-consideration and specified that if no decision was made within this period, the refund should be transmitted to the petitioner with interest. The court emphasized that reasons for withholding the refund should be provided to the petitioner promptly. The petitioner was allowed to take remedial steps if needed. The court's decision was communicated to the parties, and the petitioner was eventually granted the refund amount on 29th August, 2020.

2. Despite receiving the refund, the petitioner was still dissatisfied as interest under Section 244A for the period from 1st December, 2019 to 31st August, 2020 had not been granted. The petitioner contended that there was no statutory remedy available for this relief. The Senior Standing Counsel for the Revenue stated that he needed to ascertain the reasons for the non-grant of interest. The court, not wanting to prolong the matter, directed the Respondent to investigate and process the request for interest within four weeks. If the Revenue determined that interest was not payable, a speaking order explaining the decision was to be provided to the Petitioner. The petitioner was granted the liberty to challenge such an order if necessary. The court disposed of the writ petition with these directions, ensuring a timely resolution of the issue.