TMI Blog2018 (2) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld AR as 29.02.2008, 4.02.2008 and 3.02.2009. The date on which the refund is granted is the date of the refund voucher/order which is signed and issued on 9.6.2010. The AO shall verify the date of payment of taxes and taking the date of grant of refund as 9.6.2010, determine the number of months for which the interest is payable at the prescribed rate of interest in light of above discussions and the interest so determined is directed to be paid to the assessee. - ITA. No. 905/JP/2017 - - - Dated:- 5-2-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P.C. Parwal (CA). For The Revenue : Shri Prithviraj Meena (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-2, Jaipur dated 17.10.2017 for Assessment Year 2005-06 wherein the assessee has challenged the action of ld. CIT(A) in upholding the action of the AO in not allowing interest of ₹ 11,36,857/- u/s 244A for the month of June, 2010 even when the approval for refund was issued on 04.06.2010. 2. Briefly stated, the facts of the case are that the order u/s 143(3)/250/254 was passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onth and any fraction of the month shall be deemed to be full month and interest shall be so calculated. It was submitted that it is an undisputed fact that refund is granted on 09.06.2010 as evident from the income tax refund voucher/order dated 09.06.2010 which is available at the assessee s paper book page no. 3. Further our reference was drawn to the CBDT Circular No. 20D (XXII-22) of 1968, dated 20.08.1968 which reads as under:- Under the terms of s. 243, interest is payable by the Government where the refund is not granted within three months from the date on which the total income is determined, and the interest where payable is to be calculated at the specified rate, from the date immediately following the expiry of the three months aforesaid to the date of the order granting the refund. From this it is clear that the date of the order granting the refund is the date of the refund voucher itself. The view stated to have been taken by some ITOs, that the date of the assessment order is to be taken as the date of the order granting the refund is not correct. Thus, in cases where interest is payable by the Central Government to assessees under s. 243 of the Act, such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the legislative intendment as contemplated under section 244A of the Income-tax Act, 1961, and entitles the assessee for interest on the refund amount under section 244A and also on equitable consider action till the date of service of refund order ? 11. The Hon ble Rajasthan High Court while dismissing the appeal held as under: The limited controversy in this appeal is whether the interest should be granted till the date of the despatch of the refund order or the date when the order regarding payment of interest has been signed. The relevant provision is clause (a) of sub-section (1) of section 244A of the Income-tax Act. For ready reference, that reads as under : Where the refund is out of any tax collected at source under section 206C or paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of two-third per cent, for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted. In clause (a) the words have been used refund is granted . Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest at the prescribed rate for every month or part of a month comprising the period from the date of payment of the tax to the date on which the refund is granted. If such period is a fraction of a month, the same shall be deemed to be a full month and the interest shall be calculated for the entire month accordingly. In other words while calculating the period for grant of interest, if there is any fraction of a month, such fraction shall be ignored and instead, the assessee shall be paid interest for the full month. 29.0 So much is clearly emerging from the plain language used in the statutory provisions noticed by us. The case of the assessee however is that the word month should be considered as per British Calender as defined in Section 3(35) of the General Clauses Act and accordingly if there is a fraction of a month on either side of the events i.e. payment of tax or refund thereof, both fractions should be considered as full months and for both months the assessee must be held entitled to receive interest. 37.0 To our mind the words appearing in sub-section (1) of section 244A comprised in a period are significant. In clause (b) of section 244A (1) it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ult. Under this background various Courts were of the opinion that the term month must be understood as defined under Section 3(35) of the General Clauses Act. The Courts were of the opinion that there is nothing repugnant in Section 271(1)(a) of the Act so as to reject the applicability thereof. In the present case, however, we find that there are inbuilt indications why the term month must not be understood as British calendar month. Any other interpretation as already observed would lead to anomalous situation. 14. In light of section 244A, Rule 119A and the legal proposition so laid down by the Hon ble Rajasthan High Court in case of Rajasthan State Electricity Board (supra), and Hon ble Gujarat High Court in case of Arvind Mills (supra), in the instant case, where the assessee has paid the taxes and such taxes have been refunded, the assessee is to be paid interest at the prescribed rate for every month or part of a month comprising the period from the date of payment of the tax to the date on which the refund is granted. If such period is a fraction of a month, the same shall be deemed to be a full month and the interest shall be calculated for the entire month accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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