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TMI Blog2016 (9) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 244A of the Act from the date of issuance of order u/s 143(1) up to the actual date of granting of funds. 2. During the course of hearing, arguments were made by Shri Omprakash Meena, Authorised Representative (AR) on behalf of the Assessee and by Shri R.C. Jain, Departmental Representative (DR) on behalf of the Revenue. 3. The brief background of the case as noted from the orders of lower authorities are that the AO passed an order u/s 154 of the I.T. Act rejecting the claim of the assessee relating to interest u/s 244A of the IT. Act, wherein the AO held that on verification of records the contention of the assessee was found to be incorrect, since the refund of Rs. 10,39,710/- determined u/s 143(1) was less than 10% of gross tax of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin stipulated time, interest has to be paid under sec. 244 of the Act. Interest on refund is a substantive right of the assessee & statutory obligation of the AO Clause (b) of sub section (1) of sec. 244A opens with the words "in any other case" that means in any other case than the amount paid under clause (a) of sec. 244A. Circular No. 549, dt. 31st Oct. 1989, clarified the purpose and object of introducing section 244A of the Act to replace sections 214, 243 and 244 of the Act as providing for payment of interest by the Department for delay in grant of refunds since there were some lacunae in the earlier provisions with regards to non-payment of interest by the Government to the assessee for money remaining with the Government. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sub-section 143(1), then, no interest is payable to the assessee. But, the assessee submits that undisputedly, no refund should be payable up to the date of determination of tax u/s 143(1). But, if the amount payable to the assessee is withheld by the department beyond that date and that too without any reasons attributable on the part of the assessee, then amount of refund should be granted to the assessee for the period during which amount is withheld by the department beyond the date of passing of order u/s 143(1). In support of his arguments, he placed reliance inter alia upon the judgment of Hon'ble Madras High Court in the case of CIT v. Cholamandalam Investment and Finance Co. Ltd. 294 ITR 438 (Mad) and of Delhi High Court in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable in the subsequent year at the time of filing of return for subsequent year. Under these circumstances, the revenue is expected and obliged under the Rajashekhar 6 Swaminathan law to return the excess amount collected from the assessee as per the earliest occasion while framing order/intimation u/s 143(1). The state is not expected to enjoy unjust enrichment at the cost of the tax payers. Article 265 of Constitution of India clearly says that no tax can be collected except with the authority of law. Under these circumstances, various courts have time and again issued strict instructions and guidance to the revenue authorities to refund the amount of excess tax collected from the assessee on its earlier convenience. It is further note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d tax or advance tax is a method now statutorily adopted by fiscal legislation to ensure that the amount of tax which has been duly paid in prescribed time and provisions in that behalf forms part of the recovery machinery provided in taxing statute. Refund due and payable to the assessee is a debt owed and payable by the Revenue. The state having received the money without right, and having retained and used it, is bound to make the party good, just as an individual would be under like circumstances. The obligation to refund money received and retained without right implies and carries with it the right to interest. Whenever money has been received by a party which ex ae quo et bono ought to be refunded, the right to interest follows, as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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