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2022 (7) TMI 1077 - AT - Income TaxInterest u/s 244A - non-grant of interest for delayed period of 29 months in granting the tax refund - HELD THAT:- Interest u/s 244A shall be granted to the assessee on delayed refund subject to the provision of said section - A.O. while granting refund u/s 237 ought to have calculated interest u/s 244A for the delayed refund, unless the delay is caused by the assessee’s fault. The CBDT in its Instruction No.7/2013 dated 15th July, 2013, has endorsed the observation in case of Own motion v. UOI & Others in [2013 (3) TMI 316 - DELHI HIGH COURT] wherein, the Hon’ble High Court had held that the assessee cannot be denied interest on refund unless the delay is caused by the assessee’s fault. When the refund was finally given on 27.07.2020, the A.O. ought to have calculated interest u/s 244A of the I.T.Act while granting refund (For the delayed refund by 29 months). The rectification order dated 31.07.2020 having failed to calculate interest u/s 244A (which is automatic unless delay is attributable to assessee’s fault), the first appellate authority was within his jurisdiction to have entertained the claim of interest on delayed refund u/s 244A which was repeatedly requested by the assessee vide its letters dated 05.04.2018, 01.05.2018, 25.05.2018, 02.08.2018, 08.06.2020, 29.10.2020 and 28.02.2022. In the interest of justice and equity, we restore the issue to the files of the A.O. The A.O. is directed to take a decision in accordance with law and grant interest u/s 244A of the I.T.Act with reference to the delayed refund amount (refund credited to assessee’s bank account on 27.07.2020). The A.O. shall afford a reasonable opportunity of being heard to the assessee before a decision is taken in the matter. Appeal filed by the assessee is allowed for statistical purposes.
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