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).
