Case Law Details
PCIT Vs Ambuja Darla Kashlog Mangoo Transport Co-operative Society (Himachal Pradesh HC)
Main issue under consideration in this appeal is Whether the impugned order of the Ld. ITAT for payment of compensation on delayed refund and interest paid is illegal and without jurisdiction since the statutory provisions do not provide for the same.
The case of the appellant is that the respondent Society-assessee filed return of income for the assessment year 1996-97 on 13.03.1997, which was processed under Section 143 (1) of the Income Tax Act, (for short ‘the Act’) on 22.12.1997. The further case of the appellant is that for the assessment years 1996-97 to 1999-2000, certain refunds arising out of excess TDS were issued in favour of the assessee. However, interest under Section 244-A of the Act was not paid in respect of some of the refunds, while in the case of some other refunds, interest was paid for a shorter period than what was claimed by the assessee. It is averred in the appeal that the interest was refused on the ground that the delay in issuing refund was attributable to the assessee. Against the order of the Assessing Officer refusing to grant interest under Section 244-A of the Act, the assessee filed an appeal before the CIT(A) Solan . The CIT (A), Solan dismissed the appeal on the ground that the question as to whether any part of the delay was attributable to the assessee is a question to be decided by the Chief Commissioner or Commissioner of Income Tax under Section 244- A(2) of the Act. Then, the matter was referred to the Commissioner of Income Tax, Railway Board Building, the Mall, Shimla (hereinafter to be referred as ‘the CIT’). The CIT vide its order dated 24.10.2008, dismissed the appeal while exercising its powers under Section 244 of the Act and the Assessing Officer was directed to pay interest to the assessee from 14.03.1997 to 22.12.1997 on refund of `2,76,363/-. Thereafter, the Assessing Officer issued refund of `41,545 on 31.01.2009. It is further averred in the appeal that subsequently, the assessee filed an application under Section 154 of the Act on 15.02.2010, requesting therein to allow interest on delayed interest on the refund. The Assessing Officer vide its order dated 30.06.2011 (Annexure P-2) rejected the application of the assessee.
As far as the submission of the learned Senior Counsel for the appellant to the effect that there is no provision under Section 244-A of the Act in respect of payment of interest on delayed refund is concerned, the Hon’ble Supreme Court in judgment cited by the learned Counsel for the respondent in case titled as Commissioner of income Tax Vs. HEG Ltd, supra, has elaborated the words ‘any amount’. It is apt to reproduce to reproduce the relevant portion of the aforesaid judgment herein:-
“The next question which we are required to answer is-what is the meaning of the words “refund of any amount becomes due to the assessee” in Section 244A? 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 Rs. 45,73,528 and tax paid after original assessment of Rs. 1,71,00,320. The Department contends that the words “any amount” will not include the interest which accrued to the respondent for not refunding Rs. 45,73,528 for 57 months. We see no merit in this argument. The interest component will partake the character of the “amount due’ under Section 244A. It becomes an integral part of Rs. 45,73,528 which is not paid for 57 months after the said amount became due and payable. As 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 244A 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 Rs. 45,73,528. The principal amount of Rs. 45,73,528 has been paid on December 31, 1997 but net of interest which, as stated above partook the character of “amount due” under Section 244 A”
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