TMI Blog2024 (3) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... r non-issuance of the refund alongwith additional interest which is statutorily prescribed u/s 244A(1A) of the Act should be weighed on the anvil that those reasons are attributable to the assessee or not. In the instant case, it is seen that the additional interest of three percent per annum as mandated u/s 244A(1A) of the Act is the statutorily prescribed interest and can only be denied if the statute so permits. It is also evident that the contingency for the denial of additional interest u/s 244A(1A) is envisaged u/s 244A(2) of the Act and only on the ground where the delay is attributable to the assessee. In any case, it is not the case of the Revenue that the COVID-19 pandemic is attributable to the assessee.Revenue may have had some difficulties in dealing with such instances, however, the same would not absolve the Revenue from the rigour of Section 244A(1A) of the Act. Notably, since the Revenue has already granted the interest under Section 244A(1) of the Act without attributing any reason of delay to the assessee, we do not find any cogent reason for not granting additional interest as mandatorily prescribed under Section 244A(1A) - reasons of delay attributed to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further stated that the assessee, vide its letter dated 06 April 2021, approached the Central Board of Direct Taxes [ CBDT ] apprising the inherent infirmity in the appeal effect order and again pointing out that the refund aggregating to the tune of INR 211.96 crores for Assessment Year [ AY ] AY 2010-11 remained outstanding for the past two years, thereby, requesting the CBDT to intervene in the matter. 6. Thereafter, on 02 July 2021, the Revenue issued another intimation under Section 245 of the Act proposing adjustment of the refund against the demands outstanding which was duly objected by the assessee. 7. It is further stated that the assessee vide its letter dated 06 August 2021 acknowledged that part of refund granted to it on 30 July 2021 amounting to INR 187,68,28,630/- had been received and requested the Revenue to issue the remaining refund alongwith statutory interest. Subsequently, on 19 May 2022, the Revenue passed a rectification order under Section 154 read with Section 250 and Section 143(3) of the Act, whereby, balance refund of INR 21,61,76,130/- was determined including the interest under Section 244A(l) of the Act. 8. In the said order, since additional inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 226 of the Constitution. 12. We have heard learned counsels appearing on behalf of the parties and perused the record. 13. The short controversy in the instant writ petition lies in a narrow compass as to whether the assessee, in the facts and circumstances of the instant case is entitled to additional interest as prescribed under Section 244A(1A) of the Act or not. Before proceeding further, it is pertinent to refer to Section 244A(1A) of the Act, which reads as under 244-A. Interest on refunds. :- *** [(1-A) In a case where a refund arises as a result of giving effect to an order under Section 250 or Section 254 or Section 260 or Section 262 or Section 263 or Section 264, wholly or partly, otherwise than by making a fresh assessment or reassessment, the assessee shall be entitled to receive, in addition to the interest payable under sub-section (1), an additional interest on such amount of refund calculated at the rate of three per cent per annum, for the period beginning from the date following the date of expiry of the time allowed under sub-section (5) of Section 153 to the date on which the refund is granted:] [Provided that where proceedings for assessment or reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard, it is again mentioned that, CIT(A) order was received in this office on 26.06.2019. Aggrieved by the order, Revenue had filed an appeal before Hon'ble ITAT in the month of August, 2019. On receipt of CIT(A) order, consequential proceedings were initiated in ITBA portal giving effect to CIT(A) order in the month of August, 2019 itself. 4.0 It is pertinent to mention that vide Hon'ble High court of Hyderabad order dated 17.08.2015 (F/G), M/s. Genpact India got amalgamated with M/s. Empower Research Knowledge Service Pvt. Ltd. w.e.f. 01.04.2015. Subsequently, the company M/s. Empower Research Knowledge Service Pvt. Ltd. got renamed to M/s. Genpact India Pvt. Ltd. (GIPL). 5.0 Due to the above stated facts, the appeal effect order could not be passed by our office in the system on account of the following issues: i. The appeal effect order was not passed on the old PAN of M/s. Genpact India since it was non-existent. If in case, the appeal effect was given on New PAN, there was no functionality on ITD/ITBA to migrate the Tax credit from the old PAN to new PAN. ii. There were certain demands outstanding in the system under old PAN of M/s. Genpact India and the refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flect that the denial of additional interest is based on the aforementioned reasons namely, amalgamation of the assessee, non-availability of the functionality of ITBA portal and the prevailing COVID-19 situation. 19. It is noteworthy that the primary rationale behind denying refund to the assessee by the Revenue is non-functionality of ITBA portal due to the amalgamation of the assessee. It is the case of the Revenue that due to the amalgamation of the assessee, the appeal effect order could not be passed on the old Permanent Account Number [ PAN ] of the assessee since it was non-existent. It is also the case of the Revenue that if in case, the appeal effect was given on new PAN, there was no functionality on ITBA portal to migrate the tax credit from the old PAN to the new PAN of the assessee. 20. However, we do not find any merit in the aforesaid contention of the Revenue as a bare perusal of the record would reveal that the assessee had already intimated the Revenue regarding the scheme of amalgamation on 18 April 2016 itself and thus, the amalgamation of the assessee is not a novel fact which the Revenue had been apprised of, post the CIT(A) order. Thus, the responsibility im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee sections was 15% per annum. 11.3. These provisions, apart from being complicated left certain gaps for which interest was not paid by the Department to the assessee for the money remaining with the Government. To remove this inequity, as also to simplify the provisions in this regard, the Amending Act, 1987, has inserted a new Section 244-A in the Income Tax Act, applicable from the assessment year 1989-1990 and onwards which contains all the provisions for payment of interest by the Department for delay in the grant of refunds. The rate of interest has been increased from the earlier 15% per annum to 1.5% per month or part of a month, comprised in the period of delay in the grant of refund. The Amending Act, 1987, has also amended Sections 214, 243 and 244 to provide that the provisions of these sections shall not apply to the Assessment Year 1989-1990 or any subsequent assessment years. 23. Furthermore, the intent behind Section 244A of the Act and the statutory obligation of the Revenue to issue refund alongwith interest is also encapsulated in the decision of the Hon ble Supreme Court in Union of India v. Tata Chemicals Ltd. [(2014) 6 SCC 335], wherein, it was held as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployees of the department were working remotely and in limited capacity, principles of equity may be considered by this Court and the decision of the Revenue in denying additional interest as permitted under Section 244A(1A) of the Act must be upheld. 25. It is evident that concomitants of the principles of equity can be resorted to when the remedy prescribed under the law is impermissible or unjustified. It is a trite position of law that principle of equity is not the panacea to cure any defect rather it can only supplement the law and not supplant it. 26. The above position of law also holds feet in light of the decision of the Hon ble Supreme Court in the case of National Spot Exchange Ltd. v. Dunar Foods Ltd. (Resolution Professional) [(2022) 11 SCC 761], wherein, it was observed as under:- 15.1. In BSNL v. Mishri Lal, (2011) 14 SCC 739 , it is observed that the law prevails over equity if there is a conflict. It is observed further that equity can only supplement the law and not supplant it. 15.2. In Raghunath Rai Bareja v. Punjab National Bank, (2007) 2 SCC 230], in paras 30 to 37, this Court observed and held as under : 30. Thus, in Madamanchi Ramappa v. Muthaluru Bojjappa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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