Case Law Details
CIT Vs Syndicate Bank (Karnataka High Court)
Conclusion: When an order of refund was issued, the same should include interest payable on the amount, which was refunded. If the refund did not include interest due payable on the amount refunded, the revenue would be liable to pay interest on the short fall. This did not amount to payment of interest on interest.
Held: Revenue held that interest on delayed refund interest could not be granted since there was no specific provision in the Act for payment of interest on the amount of interest and Department had not wrongly retained the refund amount. It was held that when an order of refund was issued, the same should include interest payable on the amount, which was refunded. If the refund did not include interest due payable on the amount refunded, the revenue would be liable to pay interest on the short fall. This did not amount to payment of interest on interest. It was pertinent to mention here that if the interest had to be computed after 01.04.1989, the same had to be computed in accordance with Section 244A only and assessee was entitled to interest in terms of Section 244A of the Act only.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 1987-88. The appeal was admitted by a bench of this Court vide order dated 10.10.2014 on the following substantial questions of law:
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What a shame- it took almost 35 years to settle an income tax case, this is the reason India is still a poor country.