TIONG WOON PROJECT & CONTRACTING PTE LTD.,CHENNAI vs. ACIT, INTL. TAXN. CIRCLE-2(2), CHENNAI

ITA 1883/CHNY/2026Status: DisposedITAT Chennai25 September 2026AY 2013-1413 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that CBDT Circular No. 11/2024 is applicable to the present facts. It reasoned that paragraph 6 of the circular, which deals with the powers of acceptance/rejection within monetary limits delegated to tax authorities for returns claiming refund and supplementary claims, is not independent but must be read with paragraphs 1 to 5. Specifically, clause (ii) of paragraph 6 states that no interest will be admissible on belated claims of refunds. The Tribunal found no merit in the assessee's argument that clause (ii) is not applicable because the issue does not involve a supplementary claim, holding that clause (ii) applies to any belated claim of refund, as in the present case. Therefore, the denial of interest under Section 244A by the AO and confirmed by the CIT(A) was found to be correct. The Tribunal also found that the observations of the Hon'ble High Court of Meghalaya in the case of Meghalaya Cooperative Apex Bank Ltd. were not applicable to the facts and circumstances of the present case. Consequently, the grounds raised by the assessee were dismissed, and the order of the CIT(A) was upheld. No issue was expressly left undecided.

What were the facts?

The assessee, Tiong Woon Project & Contracting Pte Limited, a Singapore-incorporated foreign company, is appealing against orders from the CIT(A) for Assessment Years 2012-13 and 2013-14. The assessee earned income from construction projects in India and approached the Authority for Advance Rulings (AAR) regarding taxability. Due to the pending AAR application, the assessee did not file its return of income by the due dates. The AAR ruled the income taxable in India on August 16, 2016. The assessee subsequently filed its return for AY 2012-13 on March 4, 2017, claiming a refund, and also sought condonation of delay from the CBDT under Section 119(2)(b). The CBDT dismissed the condonation petition on November 3, 2023. The assessee filed a writ petition before the Madras High Court, which condoned the delay on January 22, 2024. Following this, the CIT (International Taxation) allowed the filing of a fresh return, which was filed on November 26, 2024. The Assessing Officer processed this return under Section 143(1) on June 2, 2025, granting the refund but denying interest under Section 244A. The CIT(A) upheld this denial, relying on CBDT Circular No. 11/2024.

What were the issues?

1. Whether the assessee is entitled to interest on refund under Section 244A of the Income-tax Act, 1961, for the period the funds were withheld, despite the delay in filing the return of income. Assessee's contentions: The assessee argued that interest under Section 244A is compensatory for the deprivation of funds, citing the Supreme Court in M. Chandra Sekhar (1985) 151 ITR 433 (SC). They contended that the delay was not attributable to them as they approached the AAR for clarification. They also argued that CBDT Circular No. 11/2024 is not applicable because the delay was condoned by the High Court before October 1, 2024, and the circular's conditions regarding delegated powers apply only to pending applications as of that date. They further relied on the Meghalaya High Court's decision in Meghalaya Cooperative Apex Bank Ltd. Alternatively, they claimed interest from the date of filing the Section 119(2)(b) application. Revenue's contentions: The revenue argued that the facts in the Meghalaya High Court case are dissimilar. They contended that interest on refund commences from a valid return and referred to paragraph 7 of Circular No. 11/2024, stating that delegated powers cover applications for condonation of delay pending as of October 1, 2024. They argued that returns filed after the due dates are invalid unless regularized by a condonation order under Section 119(2)(b). Since the initial return filed on March 4, 2017, pre-dated the condonation order, it was considered invalid. The return filed on November 26, 2024, was in consequence of the High Court's order. They vehemently argued that no interest is admissible on belated claims of refund as per Circular No. 11/2024.

Which sections of the Income-tax Act were involved?

Section 244A,Section 119(2)(b),Section 139,Section 143(1)

AI-generated summary — verify with the full judgment below

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S.R. RAGHUNATHA

Hearing: 30.06.2026Pronounced: 25.09.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

These appeals filed by the assessee are directed against the separate orders both dated 28.11.2025 passed by the ld. Commissioner

:-2-: ITA Nos: 1882 & 1883/Chny/2026

of Income Tax (Appeals), Chennai-16, for the asse

The order continues below.

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