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2022 (10) TMI 1107 - AT - Income TaxInterest u/s 244A on refund of taxes in respect of TUFS Subsidy - whether the proceedings resulting in refund are delayed for reasons attributable to the assessee and the period of such delay which shall be excluded from the period ? - claim of the Revenue is that the delay is attributable to the assessee as the assessee has not raised any such claim either in the return of income or during the course of assessment proceedings and the same has been claimed by way of additional ground of appeal before the CIT(A) by virtue of which the claim of the assessee has been allowed by the CIT(A) and refund of taxes have become due to the assessee and therefore, the assessee is only eligible for interest from the date of passing of the order of the ld CIT(A) i.e, 18/01/2019 to the date of issue of refund i.e, 13/08/2019 which has already been granted by the AO, and the period starting from the first day of assessment year i.e, 01/04/2011 to 18/01/2019 has rightly been excluded by the AO while computing interest in terms of provision of Section 244A(2) HELD HAT:- The assessee has filed an appeal before the CIT(A) on 26.03.2014 and during the course of appellate proceedings, the assessee took an additional ground of appeal for the first time before the Ld. CIT(A) vide its letter dated 04.10.2016 stating that TUFS subsidy which has been received by the assessee from the Ministry of Textiles is exempt from tax and should be reduced from the assessed income. CIT(A) vide order admitted the additional ground of appeal and held that the TUFS subsidy received by the assessee company from the Ministry of Textiles, Government of India be treated as capital receipt and directed the AO to reduce the amount of TUFS subsidy received during the year from total assessed income. Therefore, the assessee shall be eligible for interest on the refund amount with effect from 04/10/2016 (and not from 01/04/2011) till the date of grant of refund. We make it clear that for the prior period to 04/10/2016, it shall not be eligible for interest as the delay is attributable to the assessee. The time period taking by the ld CIT(A) in disposing off the appeal cannot be attributed to the assessee and the said period cannot be excluded. Admittedly, the assessee has already been allowed interest from the date of passing of the order of the ld CIT(A) i.e, 18/01/2019 to the date of issue of refund i.e, 13/08/2019. Therefore, the assessee shall be eligible for interest for remaining period starting 04/10/2016 to 18/01/2019 and accordingly, the AO is directed to allow the interest for the said period and the order of the ld CIT(A) thus stand modified. The appeal of the Revenue is partly allowed in light of aforesaid directions.
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