DCIT 3(3)(2), MUMBAI vs. M/S. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA, MUMBAI

Deputy Commissioner of Income tax, Circle 3 (3) (1), Mumbai (the learned Assessing Officer) for A.Y. 2007-08 against the appellate order passed by the National faceless appeal Centre Delhi [the learned CIT (A)] dated 21st March, 2023, wherein the appeal filed by the assessee against order passed under section 154 of the Act, dated 17th November, 2019, was allowed. Therefore, the

The learned Assessing Officer is aggrieved by the direction of the learned CIT (A) to grant interest to the assessee under section 244A of the Act, for the month of January, 2019 to May, 2019. The learned Assessing Officer is further aggrieved that the learned CIT (A) has held that assessee should be granted interest under section 244A of the Act, up to the date of receipt of refund order by the assessee without appreciating the fact that under the Income-tax Act, 1961, provision is to grant interest under section 244A of the Act, up to the date of grant of refund and not up to the date on which refund was actually received by the assessee.

The brief fact shows that while passing the order giving effect to the order of the tribunal in & 4220/Mum/2011 dated 23rd March, /2018 the total income of the assessee was determined at ₹ 1,218,421,430. According to that refund of ₹365,492,370 was determined. The above refund order was received by the assessee on 10th May, 2019. However, the interest under section 244A of the Act was calculated by the learned AO till the date of order giving effect i.e. December 2018. But the assessee received the refund order in May 2019 and therefore, the assessee was eligible for interest up to May 2019. The assessee preferred a rectification application before the learned Assessing Officer for non-receipt of interest on refund for the month of January 2019 to May 2019 on 17th May, 2019. Several reminders letters were also addressed to the Assessing Officer. However, the learned Assessing Officer is required to pass an order under section 154 of the Act within a period of six months from the end of the month in which application was made. But the learned Assessing Officer did not

The learned Departmental Representative referred to the provisions of section 244A of the Act and stated that interest is required to be granted up to the date of grant of the refund and not to the receipt of the refund order.

The learned Authorized Representative referred to the order of the learned CIT (A) stated that the order of the learned CIT (A) is following the decision of the Hon'ble Bombay High Court and therefore, there should not be any grievance to the revenue.

We have carefully considered the rival contentions and perused the orders of the lower authorities. The solitary issue before us in this appeal is that when the refund is issued to the assessee, the interest under section 244A of the Act is required to be

In the result, the appeal of the learned Assessing Officer is dismissed.