GODREJ PROJECTS DEVELOPMENT LTD ,MUMBAI vs. DY CIT CIRCLE 1(1)(1) , MUMBAI

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ITA 1033/MUM/2026Status: DisposedITAT Mumbai28 April 2026AY 2019-205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the calculation of interest under Section 244A, especially when a refund is adjusted against outstanding demand, is not a debatable issue. It is a matter of objective verification of records. The Tribunal found the CPC's computation lacked transparency.

What were the facts?

The assessee claimed short grant of interest under Section 244A on a refund. The Assessing Officer passed an order under Section 154 granting credit for prepaid tax and computed interest. The CIT(A) dismissed the claim, holding that the issue involved a debatable interpretation outside the scope of Section 154.

What were the issues?

Whether the calculation of interest under Section 244A on a refund adjusted against outstanding demand is a debatable issue beyond the scope of Section 154. Whether the CPC's computation of interest was transparent and accurate.

Which sections of the Income-tax Act were involved?

Section 244A,Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BENERJEE

For Appellant: Shri Ajit Pal Singh Daia (Sr. AR)
Hearing: 27.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BENERJEE (JUDICIAL MEMBER)

ITA No.1033/MUM/2026 Assessment Year: 2019-20

Godrej Projects Development Ltd, The Assistant Director of Income 5th Floor, Godrej One, Pirojshanagar, Tax, Centralized Processing Vs. Eastern Express Highway, Vikhroli (East) Centre, Bengaluru, (The Deputy Mumbai - 400079. Commissioner of Income Tax, Circle 1(1)(1), 5th Floor Aayakar Bhawan, Maharshi Karve Road, Mumbai – 400020, Maharashtra. PAN NO. AAECG 0366 L APPELLANT RESPONDENT

: Shri Jeet Kamdar Assessee by : Shri Ajit Pal Singh Daia (Sr. AR) Department by : 27.04.2026 Date of Hearing : 27.04.2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against the order dated 30.11.2025, passed by the Learned Additional/Joint Commissioner of Income Tax Appeals, Agra [in short ‘the Ld. CIT(A)’] for Assessment Year (in short ‘A.Y’) 2019-20, arising the sole ground as under:

“The learned Commissioner of Income Tax (Appeals) erred in dismissing the ground of short grant of interest under Section 244A of the Act on the

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refund due to the Appellant Company by stating that in the absence of fund due to the Appellant Company by stating that in the absence of fund due to the Appellant Company by stating that in the absence of any patent error or mis any patent error or mis-application of the prescribed period or rate that is application of the prescribed period or rate that is self evident from the record, no interference is called for in the self evident from the record, no interference is called for in the self evident from the record, no interference is called for in the computation of interest under Section 244A o computation of interest under Section 244A of the Act as made by the f the Act as made by the Centralized Processing Centre in the Rectification Order Centralized Processing Centre in the Rectification Order.”

2.

We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant material on record. the relevant material on record. In the case, the Assessing Officer the Assessing Officer [‘AO’] passed an order u/s 154 of the order u/s 154 of the Act, dated 16.06.2021, Act, dated 16.06.2021, wherein he granted credit of the prepaid tax amounting to wherein he granted credit of the prepaid tax amounting to wherein he granted credit of the prepaid tax amounting to Rs.8,37,24,739/- and computed the refund of the same amount. and computed the refund of the same amount. and computed the refund of the same amount. The CPC further com The CPC further computed interest u/s 244A of Rs.62 puted interest u/s 244A of Rs.62,79,353/-, which is evident from Page No.4 of the impugned order u/s 154 of which is evident from Page No.4 of the impugned orde which is evident from Page No.4 of the impugned orde the Act, passed by the C the Act, passed by the Central Processing Centre(CPC PC), Bangluru.

3.

The Ld. CIT(A), however however, was of the view that debatable hat debatable issues cannot be considered u/s 154 of the Act. The relevant finding of the cannot be considered u/s 154 of the Act. The relevant finding of the cannot be considered u/s 154 of the Act. The relevant finding of the Ld. CIT(A) is reproduced as under: Ld. CIT(A) is reproduced as under:-

“6.7. Coming to the grounds relating to interest under section 244A, the Coming to the grounds relating to interest under section 244A, the Coming to the grounds relating to interest under section 244A, the appellant has claimed appellant has claimed that interest on refund should be granted up to the that interest on refund should be granted up to the date of actual receipt of refund and that there is short grant of interest in date of actual receipt of refund and that there is short grant of interest in date of actual receipt of refund and that there is short grant of interest in the impugned rectification order. Sec the impugned rectification order. Section 244A provides for interest on tion 244A provides for interest on refund as per the formula prescribed therein and for the period laid down refund as per the formula prescribed therein and for the period laid down refund as per the formula prescribed therein and for the period laid down in the section. In rectification proceedings under section 154, only in the section. In rectification proceedings under section 154, only in the section. In rectification proceedings under section 154, only mistakes apparent from the record can be corrected. The appellant has mistakes apparent from the record can be corrected. The appellant has mistakes apparent from the record can be corrected. The appellant has not demonstrated any dear computational or clerical mistake apparent nstrated any dear computational or clerical mistake apparent nstrated any dear computational or clerical mistake apparent from the record in the working of interest under section 244A by CPC. The from the record in the working of interest under section 244A by CPC. The from the record in the working of interest under section 244A by CPC. The grievance raised essentially involves a debatable interpretation of the grievance raised essentially involves a debatable interpretation of the grievance raised essentially involves a debatable interpretation of the expression "date on which the refund is granted", expression "date on which the refund is granted", which falls outside the which falls outside the limited scope of section 154. In the absence of any patent error or mis- limited scope of section 154. In the absence of any patent error or mis limited scope of section 154. In the absence of any patent error or mis application of the prescribed period or rate that is self application of the prescribed period or rate that is self-evident from the evident from the record, no interference is called for in the computation of interest under record, no interference is called for in the computation of interest under record, no interference is called for in the computation of interest under section 244A as made by CPC in the rectification order. The grounds 44A as made by CPC in the rectification order. The grounds 44A as made by CPC in the rectification order. The grounds relating to interest under section 244A are, therefore, rejected.” relating to interest under section 244A are, therefore, rejected. relating to interest under section 244A are, therefore, rejected.

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4.

The Ld. Counsel for the Assessee submitted that the interest The Ld. Counsel for the Assessee submitted that the interest The Ld. Counsel for the Assessee submitted that the interest under Section 244A was erroneously computed only for the period under Section 244A was erroneously computed only for the period under Section 244A was erroneously computed only for the period from 01.04.2019 to 23.06.2020 01.04.2019 to 23.06.2020 (15 months). It was contended (15 months). It was contended that the said refund was not actually issued on the date of the that the said refund was not actually issued on the date of the that the said refund was not actually issued on the date of the rectification order but was adjusted against outstanding demands cation order but was adjusted against outstanding demands cation order but was adjusted against outstanding demands for AY 2014-15 and AY 2016 AY 2016-17 on 20.08.2020. The Assessee’s core . The Assessee’s core contention is that interest must be calculated up to the actual date contention is that interest must be calculated up to the contention is that interest must be calculated up to the of adjustment, as that date constitutes the "grant of refund" wi , as that date constitutes the "grant of refund" wi , as that date constitutes the "grant of refund" within the meaning of the statute the meaning of the statute

5.

We have heard the rival submissions and perused the material We have heard the rival submissions and perused the material We have heard the rival submissions and perused the material available on record. The Ld. CIT(A) dismissed the Assessee’s claim available on record. The Ld. CIT(A) dismissed the Assessee’s claim available on record. The Ld. CIT(A) dismissed the Assessee’s claim on the ground that the dispute involved a "debatable interpretation" on the ground that the dispute involved a "debatable interpretation" on the ground that the dispute involved a "debatable interpretation" of Section 244A, thereb of Section 244A, thereby placing it outside the restrictive ambit of y placing it outside the restrictive ambit of Section 154. We find ourselves unable to concur with this We find ourselves unable to concur with this We find ourselves unable to concur with this reasoning. The mandate of reasoning. The mandate of Section 244A is clear: the Revenue is is clear: the Revenue is obligated to pay interest on refunds from the first day of the obligated to pay interest on refunds from the first day of the obligated to pay interest on refunds from the first day of the assessment year until the assessment year until the date on which the refund is granted. date on which the refund is granted. Where a refund is not paid directly to the Assessee but is adjusted Where a refund is not paid directly to the Assessee but is adjusted Where a refund is not paid directly to the Assessee but is adjusted against a subsisting demand, the "date of grant" is logically the date against a subsisting demand, the "date of grant" is logically the date against a subsisting demand, the "date of grant" is logically the date of such adjustment. This is a matter of objective verification of the of such adjustment. This is a matter of objective verification of the of such adjustment. This is a matter of objective verification of the Department’s own records and does not involve a complex or t’s own records and does not involve a complex or t’s own records and does not involve a complex or "debatable" legal fiction. "debatable" legal fiction.

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5.1 Furthermore, we observe that the rectification order passed by Furthermore, we observe that the rectification order passed by Furthermore, we observe that the rectification order passed by the CPC lacks transparency; it fails to provide the granular the CPC lacks transparency; it fails to provide the granular the CPC lacks transparency; it fails to provide the granular computation of how the sum of computation of how the sum of Rs. 62,79,353/- was was arrived at, or the specific number of months for which the interest was credited. the specific number of months for which the interest was credited. the specific number of months for which the interest was credited.

5.2 In the interest of justice and for the purpose of factual In the interest of justice and for the purpose of factual In the interest of justice and for the purpose of factual verification, we deem it appropriate to verification, we deem it appropriate to set aside the order of the Ld. the order of the Ld. CIT(A) and restore this issue to the file of the Assessing Officer. The this issue to the file of the Assessing Officer. The this issue to the file of the Assessing Officer. The AO is directed to:

(i) Verify the actual date on which the refund was adjusted Verify the actual date on which the refund was adjusted Verify the actual date on which the refund was adjusted against the outstanding demands of other assessment years. against the outstanding demands of other assessment years. against the outstanding demands of other assessment years. (ii) Re-compute the interest under Section 244A by treating the compute the interest under Section 244A by treating the compute the interest under Section 244A by treating the date of such adjustment as the terminal date for interest uch adjustment as the terminal date for interest uch adjustment as the terminal date for interest accrual. iii) Provide a clear, speaking computation of the interest so Provide a clear, speaking computation of the interest so Provide a clear, speaking computation of the interest so granted.

5.3 Accordingly, the sole ground of the appeal is Accordingly, the sole ground of the appeal is Accordingly, the sole ground of the appeal is allowed for statistical purposes.

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6.

In the result, In the result, the appeal of the assessee of the assessee is allowed for statistical purposes.

Order pronounced in the open Court on ounced in the open Court on 27/04/2026. /04/2026.

Sd/- Sd/ Sd/- (ANIKESH BENERJEE ANIKESH BENERJEE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 27/04/2026 M. Ranganath Vittal , Sr. P.S. M. Ranganath Vittal , Sr. P.S. Copy of the Order forwarded Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai

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