2021 (12) TMI 605 - HC - Income Tax

Interest u/s 244A of the Act on the advance tax payment - HELD THAT - Under Section 237 of the Act, if any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess. Section 244A provides that where the refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this Section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the manner provided in the Sub Section (1) of Section 244 of the Act. Section 244A(2) provides that in the event the proceeding resulting in refund has been delayed for reasons attributable to the assessee, the period of delay was attributable shall be excluded from the period for which the interest is payable. In this case, the proceeding resulting in the refund cannot be stated to be delayed for reasons attributable to petitioner. In any event, there is no finding that there was delay in the proceeding resulting in the refund and that delay was attributable to petitioner. It is true that petitioner submitted original advance tax challan for ₹ 40,00,000/- on 15th February 2002 after filing the return of income and not with the return of income filed on 31st October 2001, but petitioner has received intimation accepting the returned loss and granting refund on 26th January 2003 and the assessment order itself came to be passed on 30th March 2004. Therefore, the benefit of advance tax has already been allowed to the assessee, i.e., petitioner. In any event, there is no finding either by the Assessing Officer or respondent no.1 that there was delay and how petitioner was responsible for that delay. We have to also note that no reply has been filed to this petition.

Summary

Issues:
Impugning an order under Section 244A(2) of the Income Tax Act 1961 regarding delay in refund processing.

Analysis:
1. The petitioner challenged an order passed under Section 244A(2) of the Income Tax Act 1961, where the Assessing Officer attributed the delay in refund processing to the petitioner not furnishing original advance tax challans. The Assessing Officer excluded the period of delay attributable to the petitioner from the interest payable period.

2. The petitioner filed its return of income for A.Y.-2001-2002 on 31st October 2001, declaring a loss. Despite submitting the return, the petitioner was asked to furnish it again due to a notice received under Section 142(1) of the Act. The petitioner provided the necessary documents, including advance tax challans and TDS certificates. The refund was granted for a portion of the amount paid as advance tax, but interest was not provided for a specific period.

3. An order was later passed under Section 154 of the Act, granting a refund of TDS amount along with interest under Section 244A, not related to the current petition. The assessment for A.Y.-2001-2002 was completed on 30th March 2004, determining the total loss.

4. The petitioner sought interest under Section 244A for the period not covered in the initial refund. However, the order impugned on 14th September 2004 stated that interest was not payable for the period due to the delay caused by the petitioner in submitting the original advance tax challans.

5. The court noted that there was no finding of delay attributable to the petitioner in the refund process. The petitioner had submitted the required documents after filing the return, and the benefit of advance tax had already been allowed. The court highlighted the lack of evidence showing delay and petitioner's responsibility for any delay.

6. Consequently, the court allowed the petition, issuing a writ of certiorari to quash the impugned order and a writ of Mandamus to direct the respondent to grant interest on the refund for the specified period. The court clarified that the interest amount could be independently calculated by the department.

7. The petition was disposed of, emphasizing that the court's decision did not endorse the interest amount calculated by the petitioner, leaving it to the department to make the appropriate calculations and payments.