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TMI Blog2016 (10) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... butable to the assessee. When such a view is possible and the claim for interest is denied on that specific period, do not think that this Court will be justified in taking a different view. No doubt, as rightly contended by the learned counsel for the petitioner, once the defect is cured, the parties have to go back to their original position, but the question is whether there is an obligation on the part of the Department to pay interest on the amount to be refunded. When a statute in the form of Section 244A(2) clearly specifies that interest need not be paid if the proceedings of refund is delayed for reasons attributable to the assessee, in that event, the respondents having refused interest on the basis of factual finding relying upon the statutory provision, do not think that this Court will be justified in interfering with the said orders. Coming to the judgment in Sandvik Asia Ltd. (2006 (1) TMI 55 - SUPREME Court), that was a case in which the question that had arisen was whether the assessee was entitled to interest on the amounts of interest paid under Section 214 or 244 of the IT Act. Question considered was whether an assessee was entitled to be compensated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in these circumstances, inter alia contending that the delay cannot be attributable to the petitioner that this writ petition is filed. 3. Counter affidavit has been filed by the respondent supporting the stand taken in the matter. It is inter alia contended that submitting TDS certificates without any defect is the obligation of the assessee. When substantial time has been taken to cure the defects and resubmitting the same, the delay can only be attributed to the assessee. Paragraph 6 of the counter affidavit is relevant which reads as under: 6. For the assessment year 1992-93 interest under Section 244A was not granted for 27 months from January 1993 to March 1995 for the TDS certificates resubmitted after curing defects. For the Asst.year 1993-94, interest u/s 244A was not granted from August 1994 to December 1994 for the TDS certificates resubmitted after curing defects. For the Asst.Year 1995-96 also, interest u/s 244A was not granted for various dates as the TDS certificates were resubmitted on various dates after curing defects. This is strictly in accordance with the provisions of Section 244A(2) which stipulates that if the proceedings resulting in refund are dela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to charge interest till the entire outstanding is paid. But when it comes to granting of interest on refund of taxes, the refunds are first adjusted towards the taxes and then the balance towards interest. Hence as per the stand that the Department takes they are liable to pay interest only upto the date of refund of tax while they take the benefit of assessees funds by delaying the payment of interest on refunds without incurring any further liability to pay interest. This stand taken by the respondents is discriminatory in nature and thereby causing great prejudice to the lakhs and lakhs of assessees. Very large number of assessees are adversely affected inasmuch as the Income Tax Department can now simply refuse to pay to the assessees amounts of interest lawfully and admittedly due to that as has happened in the instant case. It is a case of the appellant as set out above in the instant case for the assessment year 1978-79, it has been deprived of an amount of ₹ 40 lakhs for no fault of its own and exclusively because of the admittedly unlawful actions of the Income Tax Department for periods ranging up to 17 years without any compensation whatsoever from the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or penalty to the date on which the refund is granted. Explanation.- For the purposes of this clause, date of payment of tax or penalty means the date on and from which the amount of tax or penalty specified in the notice of demand issued under Section 156 is paid in excess of such demand. (2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the Chief Commissioner or Commissioner whose decision thereon shall be final. 7. As provided under the Statute, if any question arises regarding the period to be excluded, it has to be decided by the Chief commissioner or Commissioner, whose decision is said to be final. 8. The question is whether in the facts of the present case, the Chief commissioner was justified in rejecting interest for the period of delay. The factual aspects are not in dispute. However, the contention urged by the petitioner is two fold. The 1st contention is that the words 'procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts network of officers and infrastructure to get the defects cured. 12. In the counter affidavit filed by the 1st respondent it is submitted that for the assessment year 2001-02, interest was not granted from November 2001 to April 2004. For the assessment year 1992-93, interest was not granted for the period from January 1993 to March 1995. In respect of the assessment year 1993-94 interest was not granted from August 1994 to December 1994 and for the assessment year 1995-96 interest was not granted for various dates as TDS certificates were resubmitted on various dates after curing the defects. It is stated that the orders were passed after due application of mind. 13. Under Section 199, any deduction made in accordance with the provisions of Chapter XVII and paid to the Central Government shall be treated as payment of tax on behalf of the person from whom income tax deduction was made. Section 200 deals with the duty of the person deducting tax. Any person deducting any sum in accordance with the provisions of the Chapter shall pay within the prescribed time the sum so deducted to the credit of the Central Government or as the Board directs. They have also filed a stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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