Case Law Details
PCIT Vs Solan District Truck Operators Transport Co-op. Society (Himachal Pradesh High Court)
The issue under consideration is whether the delayed payment of interest on delayed refund becomes part of the principal amount will be eligible for interest under Section 244A?
High Court states that, as far as the submission of 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’. The question which HC 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 and tax paid after original assessment. The Department contends that the works “any amount” will not include the interest which accrued to the respondent for not refunding the amount for 57 months. HC 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 principal 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, HC are of the view that the assessee was entitled to interest for 57 months. The principal amount has been paid on December 31, 1997 but net of interest which, as stated above partook the character of “amount due” under Section 244A. In view of the ratio laid down by the Hon’ble Supreme Court in the judgment supra, the interest on the delayed refund becomes part of the principle amount and the delayed interest includes the interest for not refunding the principle amount. Accordingly, it also includes the interest on the delayed refund.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
This appeal is directed by the appellant against the order dated 7.08.2019, passed in Miscellenous Application No. 10/CHD/2019 in ITA No. 277/CHD/2017, dated 31.10.2017-A.Y. 1996-97 by the Income Tax Appellate Tribunal Division Bench, Chandigarh, (for short, ‘the ITAT’).
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