Case Law Details
FAB India Limited Vs DCIT (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal filed by the assessee concerning the grant of interest on income-tax refund under Section 244A of the Income-tax Act, 1961.
The dispute arose from the processing of the assessee’s return for Assessment Year 2021-22 under Section 143(1) by the Centralized Processing Centre (CPC), Bangalore. The assessee had filed its return on 12 March 2022 declaring nil income. During processing, the CPC made adjustments under Section 143(1)(a)(iv) relating to expenditure indicated in the audit report and an inconsistency concerning profit chargeable to tax under Section 41 amounting to ₹3,67,79,009. The assessee contended that the CPC had failed to properly allow the carry forward of current year business losses.
The CIT(A) noted that, in the scrutiny assessment completed under Section 143(3) on 22 December 2022, the Assessing Officer had accepted the assessee’s claim regarding excess provision written back under Section 41. However, interest under Section 244A had been computed only up to July 2022, whereas the refund was actually issued in November 2023.
The Tribunal observed that, pursuant to the scrutiny assessment order, the assessee became entitled to an enhanced refund. Since the refund was issued only in November 2023, the assessee was entitled to interest under Section 244A up to the date of actual grant of refund and not merely up to the date on which the refund was determined through processing under Section 143(1).
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is arising out of the order of the Additional /Joint Commissioner of Income Tax(A-7), Kolkata in appeal no. NFAC/2020-21/1061635 dated 03.12.2025. The return was processed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred “Act”) by the CPC, Bangalore vide Intimation dated 05.07.2022 for the assessment year 2021-22.
2. The only issue in this appeal of the assessee is as regards the order of the CIT(A) in not remitting the matter back to the Assessing Officer for deciding/allowing the interest on refund under section 244A of the Act, as per the provisions of the Act. In this , assessee has raised the following round no. 2 :
“That the Ld. CIT(A) has erred in not directing the Assistant Director of Income Tax, Centralized Processing Centre /Jurisdictional Assessing Officer to allow interest on refund under section 244A till the date of actual grant of refund, instead of the date of determination of the refund in the intimation under section 143(1) of the Act by the ADIT, CPC, as admissible under the provisions of the Act.”
3. We have heard Ld. CIT(DR) and gone through the records of the case. We noted that the assessee filed its return of income for the relevant assessment year 2021-22 on 12.3.2022 declaring total income at NIL. While processing the return of income, the CPC, Bangalore disallowed expenditure indicated in the audit report but not taken into account while computing the total income in the return u/s. 143(1)(a)(iv) of the Act and therefore, there being inconsistency in the amount profit chargeable to tax u/s. 41 of the Act at Rs. 3,67,79,009/-. The assessee before the CIT(A) contended that the CPC, Bangalore erred in not including the current year business loss of Rs. 45,95,13,708/- in Schedule “CFL”, despite including it under “Loss of current year to be carried forward” though at the value of Rs. 42,17,34,699/- as reduced by the adjustment made under section 41, thus denying it to be carry forward to future years. The CIT(A) noted that the AO while framing the scrutiny assessment and order u/s. 143(3) of the Act dated 22.12.2022 has allowed the claim of excess provision written back u/s. 41 of the Act and not allowing the balance loss to be carry forward. Since the AO computed the interest u/s. 244A of the Act till July, 2022 as against the refund issued in the month of November, 2023 as noted by the CIT(A) in his order vide para no. 5.3. As there is excess refund allowability to assessee in terms of scrutiny assessment order passed u/s. 143(3) dated 20.12.2022 and refund issued only in November, 2023, the assessee is entitled to interest u/s 244A till November, 2023. We direct the AO accordingly.
4. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the Open Court on 26.05.2026.
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