Case Law Details
ACIT Vs Shri Nachimuthu Palaniswamy (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT) in Chennai recently passed a judgment in favor of the assessee, Shri Nachimuthu Palaniswamy, affirming his right to interest on tax refund under Section 244A of the IT Act. The decision emphasizes the principles of fairness and equity, shedding light on the interpretation and implementation of this section in taxation proceedings.
Analysis:- The crux of the case revolved around the question of whether the assessee was eligible for interest on self-assessment taxes paid, as per the amendment to Section 244A of the IT Act introduced by the Finance Act 2016. The revenue department contended that the amendment, effective from June 1, 2016, did not have retrospective effect, thereby disqualifying the assessee from claiming interest on refunds determined prior to that date.
In a counter-argument, the CIT(A) cited various rulings, including those from the Madras High Court, supporting the assessee’s entitlement to interest on the refund of self-assessment tax. The CIT(A) also referred to the explanatory memorandum to the Finance Act, 2016, which emphasized the principles of ‘fairness and equity’ behind the amendment to Section 244A. As such, the CIT(A) directed the Assessing Officer to grant interest to the assessee, sparking the appeal by the revenue department.
The ITAT, upon hearing the appeal, found no fault in the CIT(A)’s order, stating that it followed the binding judicial precedent and the rationale behind the amendment made by the Finance Act, 2016.
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