Case Law Details
ACIT Vs TSI Business Parks (Hyderabad) Pvt. Ltd. (Supreme Court of India)
Supreme Court of India has partly allowed the appeal filed by the Assistant Commissioner of Income Tax (ACIT) against TSI Business Parks (Hyderabad) Pvt. Ltd., modifying the interest rate awarded by the Telangana High Court on the refund of ₹1,06,06,740 and ₹6,25,70,390. The High Court had directed the Income Tax Department to pay interest at a rate of 15% per annum from the date of adjustment until the date of payment.
The primary contention of the appellant, represented by the learned Additional Solicitor General (ASG), before the Supreme Court was that the statutorily prescribed rate of interest under Section 244A of the Income Tax Act, 1961, is only 6% per annum. Therefore, the ASG argued that the Telangana High Court erred in ordering a refund with interest at a significantly higher rate of 15% per annum. The appellant sought a modification of this specific portion of the High Court’s order.
Conversely, the counsel appearing for the respondent, TSI Business Parks (Hyderabad) Pvt. Ltd., submitted to the Supreme Court that the Income Tax Department had already complied with the directions issued by the Telangana High Court as outlined in paragraph 62 of the impugned judgment. In light of this compliance, the respondent’s counsel requested the Supreme Court to pass appropriate orders in the matter.
The Supreme Court acknowledged that it had previously granted an interim order on August 18, 2021, staying the High Court’s direction regarding the interest rate exceeding 6% per annum. However, the court also noted that by the time this interim order was passed, the Income Tax Department had already complied with the High Court’s order, including the payment of interest at 15%.
Considering these circumstances, the Supreme Court allowed the appeal filed by the ACIT. The court directed TSI Business Parks (Hyderabad) Pvt. Ltd. to refund the amount of interest received from the Income Tax Department that was in excess of 6% per annum. This excess amount was calculated to be ₹36,61,013. The Supreme Court ordered the respondent company to refund this sum to the Income Tax Department within a period of four weeks from the date of the Supreme Court’s order.
In conclusion, the Supreme Court upheld the Telangana High Court’s decision regarding the principal amounts of the refunds but modified the interest rate to the statutorily fixed rate of 6% per annum under Section 244A of the Income Tax Act, 1961. The appeal was allowed and disposed of in these terms, and any pending applications related to the case were also disposed of.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
2. We have heard learned A.S.G. for the appellant(s), learned counsel for the respondent and perused the material on record.
3. The only grievance of the appellant(s) is with regard to the award of interest at 15% per annum from the date of adjustment of the said amount till the date of payment of the refund of a sum of Rs.1,06,06,740/- and Rs.6,25,70,390/-.
4. Learned A.S.G. submitted that the statutorily fixed rate of interest under Section 244-A of the Income Tax Act, 1961 is only 6% per annum. Therefore, the High Court could not have ordered for refund @ 15% per annum. In the circumstances, he submitted that the said portion of the order may be modified by allowing this
5. Per contra, learned counsel for the respondent submitted that the appellant(s)/Department has already complied with the direction issued by the High Court in paragraph 62 of the impugned judgment. In the circumstances, appropriate orders may be made in the matter.
6. We find that this Court by an interim order dated08.2021 had stayed the direction of the High Court insofar as it pertains to the award of interest in excess of 6% per annum. However, by then there had been compliance of the order of the High Court.
7. We hence allow this appeal by directing the respondent to refund the amount of interest in excess of 6% per annum to the appellant(s)/Department being Rs.36,61,013/-within a period of four weeks from today. Ordered accordingly.
8. The Appeal is allowed and disposed of in the aforesaid terms.
Pending application (s) shall stand disposed of.
Leave granted.
The Appeal is allowed and disposed of in terms of the signed order.
Pending application(s) shall stand disposed of.
Author Bio
