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2021 (10) TMI 30 - HC - Income TaxDirect Tax Vivad se Vishwas Act - VSV Act - settlement of the dispute of petitioner for assessment year 2015-16 without withdrawing the interest already granted under Section 244A - HELD THAT:- Assessee would be entitled to refund but without interest. In the case at hand, interest of ₹ 42,72,210/- paid under Section 244A of the Act was not determined as payable under the VSV Act but was paid as per the assessment order passed for the Assessment Year which was more than 2 1/2 years before the declaration under the VSV Act was filed by petitioner. Therefore, the explanation is not applicable to the case at hand. Petitioner has not asked for interest under Section 244A of the Act on the amount of refund claimed in form no.1. In the explanation to Section 7 of the VSV Act, the term specifically used is any amount paid “in respect of” tax arrear. The term “tax arrear”, is defined to mean aggregate amount of disputed tax and the term “disputed tax” is defined to mean the tax payable by petitioner as if the appeal is decided against petitioner. So, the explanation only refers to the amount paid in respect of tax arrear which is refunded under the VSV Act and not any other refund amount. This implies that the reference in which the restriction of interest under section 244A of the Act is made is towards any excess payment of tax in respect of the tax arrears which is the disputed tax - VSV Act clearly envisages that no interest under section 244A of the Act is payable on the amount of tax paid towards the disputed tax which is in excess of the amount determined payable as per Section 3 of the VSV Act. The amount payable towards disputed tax will only arise post the assessment order is passed. In the case at hand, petitioner has not made any payment post the assessment order, in fact, respondent no.2 has determined a refund to petitioner in the revised assessment order after adjusting all the disputed tax. The refund determined by respondent no.2 in the assessment order is out of tax deducted at source and taxes paid prior to filing of the return of income and not on account of any amount paid towards tax arrear prior to applying under the VSV Act which has resulted in excess payment of the tax arrear (disputed tax) determined as per Section 3 of the VSV Act. The interest on refund that was paid was on the undisputed part of the excess tax paid and not on the disputed tax. In the circumstances, Form - 3 dated 11th December 2020 issued by respondent No. 1 is hereby set aside. Respondent No. 1 is directed to issue revised Form -3/fresh Form No. 3 in terms of the order mentioned above.
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