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2016 (9) TMI 1196 - KERALA HIGH COURT

2016 (9) TMI 1196 - KERALA HIGH COURT - [2016] 389 ITR 304 - Entitlement for interest under Section 244A - delay in refund - belated return filing - whether once the delay in filing the return has been condoned, it becomes a valid return and therefore grant of interest is consequential? - Held that:- The liability to pay interest on refund arises from the date when claim for refund is made with all necessary particulars. As already indicated, Section 244A(2) imposes a restriction on payment of i .....

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19(2)(b), seeking for condoning the delay in filing the return, was rejected and ultimately the matter reached this Court wherein this Court had directed the delay to be condoned. There cannot be two ways to look at it. Admittedly, there had been delay on the part of the assessee which had given rise to a situation to condone the same. Delay has been condoned only for the purpose of accepting the return. But it cannot be stated that the delay was not attributable to the assessee. Even if such in .....

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tion is filed challenging Ext.P9 by which the Commissioner of Income Tax by order dated 25/03/2013 rejected an application filed under Section 264 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') inter alia observing that there was justification on the part of the authorities to have rejected the assessee's request for interest under Section 244A of the Act. Petitioner also sought for a direction to the respondents to pay interest on refund as provided under Section .....

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n was filed, the taxable income was found to be nil and therefore the petitioner became eligible for refund of ₹ 10,47,957/- as provided under Section 247 of the Act. Application for refund was filed before the assessing authority on 01/02/2000. However, the same was rejected on the ground that the return was filed belatedly, in terms of Ext.P1 order dated 01/08/2000. Petitioner filed an application under Section 119(2) (b) of the Act before the Central Board of Direct Taxes (CBDT) seeking .....

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rved that the assessee is not entitled for interest under Section 244A. Petitioner challenged the order before the Commissioner of Income Tax (Appeals) which came to be dismissed as per Ext.P5 order dated 11/11/2008. Further, appeal was filed before the Income tax Appellate Tribunal and the matter was remitted back to the assessing officer to consider the claim under Section 244A(b) read with Explanation (2) of the Act by virtue of order dated 13/01/2011 (Ext.P6). The order of remand was challen .....

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on under Section 244A(2) that interest could be denied if the delay is attributable to the assessee, once the return is accepted and refund is ordered, such an approach is clearly illegal. This aspect of the matter had been completely ignored while passing the impugned orders. 5. Statement has been filed on behalf of the 1st respondent inter alia supporting the stand taken in the matter. It is stated that the petitioner could claim interest on the refund amount in terms of 244A(1) only if the de .....

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ounsel for the petitioner placed reliance on the judgment in Sandvik Asia Ltd. v. Commissioner of Income Tax and Others [(2006) 2 SCC 508] and the judgment in Commissioner of Income tax, Bhopal v. H.E.G.Limited [(2010) 15 SCC 349]. 7. On the other hand, the learned Standing Counsel for the respondents relied upon the judgment in Commissioner of Income Tax v. Gujarat Fuoro Chemicals [(2013) 358 ITR 291 (SC)] and the judgment of this Court in M.Ahammadkutty Haji v. Chief Commissioner of Income Tax .....

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such a question does not arise for consideration in the present writ petition. However, the Apex Court held at paragraph 30 to 34 as under: 30. In our view, the Act recognises the principle that a person should only be taxed in accordance with law and hence where excess amounts of tax are collected from an assessee or any amounts are wrongfully withheld from an assessee without authority of law, the Revenue must compensate the assessee. 31. At the initial stage of any proceedings under the Act .....

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The Delhi High Court in Goodyear India Ltd. case held that an assessee is entitled to further interest under Section 244 of the Act on interest under Section 214 of the Act which had been withheld by the Revenue. The case of the Revenue was that interest payable to an assessee under Section 214 of the Act was not a refund as defined in Section 237 of the Act and hence no interest could be granted to the assessee under Section 244 of the Act. The Court held that for this purpose Section 240 of th .....

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in the paragraph supra, the Madras High Court in Needle Industries (P) Ltd. case has also interpreted the phrase any amount in the same manner when considering the provisions of Section 244(1-A) of the Act, which also uses the same phrase in the context of interest payable by the Revenue. In express terms the Court held that the expression referred not only to the tax but also to interest. The Court agreed with a similar view taken by the Kerala High Court in Ambat Echukutty Menon. Both these we .....

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periods of delay after these dates. 9. In H.E.G.Limited (supra), the Apex Court was considering the meaning of the words any amount due in Section 244A. It was held that interest component on TDS would partake the character of amount due under Section 244A. That was a case in which the TDS was 45,73,528/-. It is held at paragraph 5 as under: 5. In the present case, as stated above, there are two components of the tax paid by the assessee for which the assessee was granted refund, namely, TDS of .....

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can be seen from the facts narrated above, this is the case of short payment by the Department and it is in this way that the assessee claims interest under Section 244-A of the Income Tax Act. Therefore, on both the aforestated grounds, we are of the view that the assessee was entitled to interest for 57 months on ₹ 45,73,528. The principal amount of ₹ 45,73,528 has been paid on 31-12-1997 but not of interest which, as stated above, partook the character of amount due under Section .....

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