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2017 (5) TMI 308 - HC - Income TaxInterest on refund - Expression ‘in any other case’ occurring in Section 244A (1) (b) - whether would include the amount of refund which constitutes the interest that has been waived by the Income Tax Department (‘Department’) under Section 220 (2A) of the Act? - Held that:- The decision in Union of India v. Tata Chemicals Limited (2014 (3) TMI 610 - SUPREME COURT ) is clear in its enunciation that even if there is no express statutory provision for payment of interest, the government cannot avoid its obligation to reimburse the lawful monies "together with accrued interest" for the period of "undue retention". Once it is clear that Section 244A (1) (b) of the Act which talks of “any other case” does not have to be interpreted restrictively and can include situations like in the present case, then it is evident that there is nothing in the said provision which prohibits the payment of interest on an amount of refund due to the Petitioners as a result of the waiver of interest under Section 220(2A) of the Act. The circular of the CBDT dated 26th April 2016 accepts the above proposition laid down in Union of India v. Tata Chemicals Limited (supra) in its entirety. The sum found refundable to the Petitioners as a result of the waiver of interest order passed by the CCIT is a definite sum that was wrongly deducted from the Petitioners as interest. Payment of interest on that sum by the Revenue cannot be characterised as payment of 'interest on interest'. Thus this Court sets aside the impugned orders of the AO denying the Petitioners interest on the amounts refunded to them pursuant to the waiver order dated 30th March 2015 of the CCIT. The interest amount as claimed by the Petitioners on the amount refunded to them will now be paid by the Department to the Petitioners within four weeks from today in terms of Section 244 A (1) (b) of the Act from the date of recovery till the date of payment.
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