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2023 (12) TMI 709 - AT - Income TaxOrder u/s 154 whereby interest granted u/s 244A reduced - reasons attributable to the assessee or not? - HELD THAT - It is not in dispute that originally the return was processed by CPC and refund of Rs. 6,01,280/- including interest of Rs. 1,00,195/- was generated. The rectification order has been passed u/s 154 of the Act by the AO/CPC by reducing the interest amount to Rs. 47,595/-. It is the case of the Revenue that the delay of issuing of refund is due to the reason attributable to the deductor of the assessee, therefore, as per section 244A(2) assessee is not entitled for such period of 19 months. The amendment to the provisions of section 244A(2) of the Act has been carried out by inserting the word or the deductor, as the case may be on 01/04/2017 vide Finance Act, 2017, therefore, the said provisions of section 244A(2) of the Act is not applicable in the present case being A.Y 2013-14 and the ld. CIT(A) committed an error in observing that the Section 244A(2) of the Act is applicable to the case of the assessee. We deem it fit to restore the issue to the file of the AO to re-compute and grant interest in accordance with law by keeping in the mind that the amendment to the Section 244A (2) of the Act is not applicable for the year under consideration. Appeal filed by the assessee is partly allowed for statistical purposes.
Issues involved:
The issues involved in the judgment are the reduction of interest on refunds by the AO CPC under section 154 of the Income Tax Act, the applicability of section 244A(2) of the Act for the assessment year in question, and the rights of the assessee to challenge the order. Reduction of Interest on Refunds: The appeal was filed against the order of the Learned Commissioner of Income Tax, National Faceless Appeal Centre, confirming the reduction of interest granted under section 244A from Rs. 1,00,195.00 to Rs. 47,595.00 by the AO CPC. The appellant contended that the AO CPC erred in passing the order without providing any opportunity of hearing as required under section 154(3) of the IT Act. Applicability of Section 244A(2) of the Act: The assessee challenged the order of the Ld. CIT(A) which upheld the reduction of interest on refund under section 244A(2) of the Act. The Ld. CIT(A) observed that if the delay in refund issuance is attributable to the assessee, the period of delay shall be excluded from the period for which interest is payable. The appellant argued that the said section was not applicable for the assessment year in question as it was amended w.e.f. 01/04/2017, and thus, the order of the lower authorities deserved to be reversed. Rights of the Assessee: The Ld. Counsel for the assessee contended that the AO/CPC committed an error in reducing interest on refunds by invoking section 244A of the Act, as the said section was not applicable for the assessment year 2013-14 due to the amendment introduced on 01/04/2017. The appellant sought to reverse the orders of the lower authorities on this ground. However, the Ld. DR argued that the provisions of section 244A were rightly invoked due to delays attributable to the assessee. Judgment Summary: The Appellate Tribunal found that the delay in issuing the refund was attributed to the deductor of the assessee, and as per section 244A(2) of the Act, the assessee was not entitled to interest for the period of delay. The Tribunal noted that the amendment to section 244A(2) was not applicable for the assessment year 2013-14, as it was introduced on 01/04/2017. Therefore, the Tribunal held that the Ld. CIT(A) erred in applying the amended provision to the case of the assessee. The issue was restored to the AO to re-compute and grant interest in accordance with the law, considering the inapplicability of the amended provision. The appeal filed by the assessee was partly allowed for statistical purposes.
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