Karnataka HC: Wipro gets supplementary 3% interest on deferred tax refund

Wipro Limited Vs JCIT (Karnataka High Court)

Karnataka High Court allowed the additional 3% interest on the delayed Income Tax Refund to Wipro ( Petitioner) from the Deputy Commissioner of Income Tax (DCIT) (Respondent).

The Petitioner approached the Writ Court to challenge the order in which the Respondent, DCIT, denied additional 3 percent interest on the allegedly delayed refund of amount related to Assessment Year 2008-09 and the Respondent denied its application filed under section 244A(1A) (“the Income Tax Act”).

The Petitioner argued that under section 115JB of the Income Tax Act, the assesse’s right to interest under section 244A(1A) is designed to restore parity to the situation where the Revenue imposes interest on late tax payments under section 234B.

The Revenue argued that Section 240 contemplates refund only after completion of the exercise mandated by the appellate order; where the assessment is set aside and a fresh assessment is ordered, the question of granting interest at once would not arise until after the amount to be refunded is determined, which occurs after the fresh assessment or reassessment is completed in term.

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