9911796707
TMI Blog2016 (8) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... has raised multiple Grounds of appeal but the sum and substance of the dispute is assessee's claim for interest on delayed grant of refund in terms of section 244A(1) of the Act for the period from the first day of the assessment year 2003-04 to the date on which the refund was granted. 3. Briefly put, the relevant facts can be summarized as follows. The appellant is a foreign company who is a tax resident of Panama. The appellant-company owned technical information and know-how pertaining to manufacture of products called Protinex and Dumex, which was sold to a Denmark based concern, EAC Nutrition A/s during the year. The said Denmark based concern had deducted tax at source and deposited the same in the Government account, but the plea o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31,000/- and interest u/s 244A of the Act of Rs. 7,59,607/- for the period 1.11.2005 (being the month in which Indemnity Bond was filed) to January, 2006 (being the month in which order u/s 154 was passed). On 20.7.2006, a refund order of Rs. 5,10,96,214/-, net of TDS was granted to the assessee. 4. In the aforesaid background, the grievance of the assessee is that the Assessing Officer has allowed interest for delay in grant of refund only for the period 1.11.2005 to 10.1.2006 whereas the interest on delayed grant of refund in terms of Sec. 244A(1) of the Act accrues to the assessee from 1.4.2003 up to the date of grant of refund, i.e., 20.7.2006. 5. Per contra, the stand of the Revenue is that the proceedings resulting in the refund wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court upheld the plea of the assessee for grant of interest on delayed refund from the first day of the assessment year up to the date of refund. The learned representative pointed out that the Hon'ble High Court noted that where tax was deducted and deposited with the exchequer in time, Sec. 244A(2) of the Act cannot be invoked to deny interest to the assessee. The judgment of the Hon'ble Kerala High court in the case of State Bank of Travancore, 42 taxmann.com 572 (Kerala) was also relied upon to justify grant of interest on delayed refund up to July, 2006 in the present case. 7. On the other hand, the ld. DR appearing for the Revenue has relied upon the order of CIT(A) by pointing out that in the present case delay was partly at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the assessee, the period of delay so attributable to assessee shall be excluded from the period for which the interest is payable. In this case, the first point made by the Revenue is that the TDS certificate for Rs. 5,06,31,000/- issued by the tax deductor did not bear the stamp of the company issuing such certificate. Assessee had pointed out before the CIT(A) that for such reason Assessing Officer required it to furnish Indemnity Bond, which was done on 11.11.2005, and thereafter credit for TDS certificate of Rs. 5,06,31,000/- was granted vide rectification order u/s 154 dated 10.1.2006. In our considered opinion, in such a situation the proceedings resulting in refund could not be said to have been delayed for reasons attributab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case stands on a much better footing than what was before the Hon'ble High Court in the case of Larsen & Toubro Ltd. (supra) inasmuch as in the present case the relevant TDS certificates were furnished alongwith the return of income and it is also irrefutable that the tax was deducted and deposited in the account of the Central Government within the stipulated period. Therefore, in our view, income-tax authorities have erred in construing that the proceedings resulting in the refund are delayed for reasons attributable to the assessee within the meaning of Sec. 244A(2) of the Act. 11. Apart therefrom, CIT(A) has made a reference to the fact that assessee had earned certain income from transaction with EAC Nutrition, Denmark for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea of the CIT(A) on this aspect. In this context, one may peruse Chapter XIXB of the Act dealing with AAR. Section 245RR prescribes that no income-tax authority or the Appellate Tribunal shall proceed to decide any issue in respect to which an application has been made to the AAR, so however, such a restriction is placed only for an assessee-applicant who is a resident of India as per the Act, whereas the appellant-assessee before us is a non-resident. Apart therefrom, we do not find any provision which places restrictions on any income-tax authority to proceed to decide any issue before it, in case an application is pending before the AAR. Be that as it may, in our view, if the proceedings resulting in refund are delayed on account of pend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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