Samarpan Foundation Vs CIT (Exemption) (Gujarat High Court)
Gujarat High Court has ruled that refunds issued under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSVA), are entitled to interest under Section 244A of the Income Tax Act, 1961, for delayed payments. This decision was made in the case of Samarpan Foundation vs. CIT (Exemption), where the petitioner, a trust, sought interest on a delayed refund amounting to Rs. 4,39,010/- on a total refund of Rs. 36,51,389/-.
The issue arose when Samarpan Foundation, a trust that had filed a ‘NIL’ income tax return for the Assessment Year 2010-11, was subject to an assessment under Section 144, determining a high taxable income and disallowing various claims. The trust challenged this assessment through a series of appeals, eventually reaching the Income Tax Appellate Tribunal (ITAT). Simultaneously, penalties under Section 271(1)(c) were imposed, which the trust also appealed.
In December 2020, the foundation opted for resolution under the DTVSVA, withdrawing its appeal before the ITAT and its penalty appeal before the CIT(A). Following the DTVSVA process, the Designated Authority issued Form No. 3 on December 7, 2020, confirming a refund of Rs. 33,26,389/- payable by March 31, 2021. A revised Form No. 3 was issued in January 2021, and Form No. 5, an order confirming full and final settlement and the refund amount, was subsequently issued.
