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TMI Blog2025 (3) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... lways available under the provisions of Section 3 of the Interest Act, 1978. Notwithstanding the provisions of the Income Tax Act, 1961 and also the Direct Tax Vivad se Vishwas Act, 2020, the Court can always grant reasonable interest if it is satisfied that the delay occurred is solely due to the fault of the Revenue. We are fortified in our views in the light of the provisions contained under Section 4 of the Interest Act, 1978.
As decided in UPS Freight Services India Pvt. Ltd. [2023 (9) TMI 34 - BOMBAY HIGH COURT] held that interest is leviable since 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. We are in respectful agreement with the view expressed by the Division Bench of the Bombay High Court and therefore, cannot find fault with the findings of the learned Single Judge in the impugned judgment. Hence, we see no reason to interfere with the findings rendered by the learned Single Judge. X X X X Extracts X X X X X X X X Extracts X X X X ..... Circle-1 Kozhikode, to the petitioner. ii) Issue a Writ of Mandamus or any other appropriate Writ, Order or Direction directing the 1st to 2nd Respondents to reconsider the Exhibit-P5 grievance application of the petitioner afresh and pass order to giving effect issuing applicable interest on refund issued from the date of issuance of Form No.5 dated 24.11.2021, in a time bound manner. iii) Pass such other and further directions in favour of the petitioner as this Hon'ble Court may deem fit and proper." 3. The learned Single Judge, who considered the writ petition negated the contention of the Revenue that interest on such excess payment is not payable because of a specific exclusion of the provision of Section 244A of the Income Tax Act, 1961 by virtue of Section 7 of the Act. The learned Single Judge proceeded to hold that the requirement of imposing interest on delayed refunds is a matter of accountability of the Department and a measure of recompense for the person who was deprived of the money. It is aggrieved by these findings that the present appeal is preferred by the Revenue. 4. Heard Sri. Jose Joseph, the learned Standing Counsel appearing for the appellants, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. (1B) Where refund of any amount becomes due to the deductor in respect of any amount paid to the credit of the Central Government under Chapter XVII-B, such deductor shall be entitled to receive, in addition to the said amount, simple interest thereon calculated at the rate of one-half per cent for every month or part of a month comprised in the period, from the date on which- (a) claim for refund is made in the prescribed form; or (b) tax is paid, where refund arises on account of giving effect to an order under section 250 or section 254 or section 260 or section 262, to the date on which the refund is granted. (2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee or the deductor, as the case may be,] 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 under sub-section (1) or (1A) or (1B), and where any question arises as to the period to be excluded, it shall be decided by the Principa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Revenue that because of the exclusion provided under the Act, the assessee is not entitled to claim interest under Section 244A of the Income Tax Act, 1961, we need to consider Sections 5 and 7 of the 2020 Act closely. Section 5, which provides for the time and manner of payment, is extracted hereunder: "5. Time and manner of payment.-(1) The designated authority shall, within a period of fifteen days from the date of receipt of the declaration, by order, determine the amount payable by the declarant in accordance with the provisions of this Act and grant a certificate to the declarant containing particulars of the tax arrear and the amount payable after such determination, in such form as may be prescribed. (2) The declarant shall pay the amount determined under sub-section (1) within fifteen days of the date of receipt of the certificate and intimate the details of such payment to the designated authority in the prescribed form and thereupon the designated authority shall pass an order stating that the declarant has paid the amount. (3) Every order passed under sub-section (1), determining the amount payable under this Act, shall be conclusive as to the matters sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was bound to pay the same within fifteen days. We are inclined to think that, since an obligation is created on the assessee to pay the amount within fifteen days, though not expressly provided, the Department is also equally bound under law to refund the excess amount within a reasonable time. In the present case, the fifteen-day period calculated from Ext.P3 order expired on 8.12.2021. The Assistant Commissioner of Income Tax, Central Circle-I, Kozhikkode, unreasonably sat over the matter after Ext.P3 order and took consequential action only on 29.11.2023. 11. In this context, it is pertinent to mention that the power of the court to grant interest is always available under the provisions of Section 3 of the Interest Act, 1978. Notwithstanding the provisions of the Income Tax Act, 1961 and also the Direct Tax Vivad se Vishwas Act, 2020, the Court can always grant reasonable interest if it is satisfied that the delay occurred is solely due to the fault of the Revenue. We are fortified in our views in the light of the provisions contained under Section 4 of the Interest Act, 1978. 12. We also take note of the fact that on similar facts, a Division Bench of the Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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