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Facts
The assessee filed an appeal against the order denying interest under Section 244A for the period of refund credit. The assessee claimed entitlement to interest from the assessment year start until the refund credit date of 23.11.2023. The Revenue argued the delay was due to the assessee's non-compliance with re-fund/re-issue requests from CPC and pointed to differences in bank accounts.
Held
The Tribunal noted that the assessee is entitled to interest on refunds. It observed that the Revenue had not granted interest under Section 244A. The Tribunal decided to set aside the lower authorities' orders and direct the Assessing Officer to conduct a limited verification.
Key Issues
Whether the assessee is entitled to interest under Section 244A on the refund amount, and if any delay in processing the refund was attributable to the assessee.
Sections Cited
244A, 143(1), 206C, 199, 139, 155, 140A, 143, 156, 250, 254, 260, 262, 263, 264, 153, 245, 115WE, 115WF, 115WG, 144, 147, 154, 155, 250, 254, 260, 262, 263, 264, 245D, 156
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI AMITABH SHUKLA
Assessment Years: 2022-23 The Madras Seva Sadan, The Assistant Commissioner of No.7, Shenstone Park, Income Tax (Exemption), Harrington Road, Chetpet, Chennai. Chennai-600 031. [PAN: AAATT2871J] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee by : Shri R.Venkatanarayanan, Advocate प्रत्यर्थी की ओर से /Revenue by : Ms.R.Anitha, Addl.CIT सुनवाई की तारीख/Date of Hearing : 07.08.2025 घोषणा की तारीख /Date of Pronouncement : 08.08.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / APL / S / 250 / 2024-25 / 1073772912(1) dated 27.02.2025 of the Learned Commissioner of Income Tax(E ) [herein after “CIT(E), Addl/JCIT(A)-1, Gurugram, for the assessment year 2022-23. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. 2.0 The only issue arising in the present appeal, through its grounds of appeal
, is regarding the denial of interest u/s 244A r.w. order u/s 143(1) to the assessee. It is the case of the appellant that it is entitled for grant of interest up to date of grant of refund i.e to say date of credit in its bank account. In the instant case date of credit was stated to be 23.11.2023 and commensurate claim of refund u/s 244A for the period 01.04.2022 to 23.11.2023 was reported to be Rs.3,24,394/-. It was accordingly argued that the Ld.CIT(A) has erroneously held that the delay in issuance / credit of refund is attributable to the appellant assessee for not timely attending to the re-refund / re-issue request proposed by CPC. It was submitted that there was no mismatch of assessee’s PAN with the bank account and that refunds of earlier and subsequent periods were duly credited to assessee’s bank account. 3.0 Per contra, the Ld.DR relied upon the order of lower authorities. It was argued that refund is credited to the bank account indicated by the assessee. The Ld.DR pointed that the bank account to which refund of earlier and subsequent period was credited was apparently different than the one relevant to the present controversy. The delay reportedly was therefore not attributable to Revenues authority. 4.0 We have heard the rival submissions in the light of material available on records. Before proceeding further, we deem it appropriate to extract the statutory stipulations prescribed in section 244A. “……Section - 244A, Income-tax Act, 1961 - FA, 2025 90[Interest on refunds. 91 244A.
92. (1) 93[Where refund 94 of any amount becomes due to the assessee 94 under this Act], he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely :- 95[(a) where the refund is out of any tax collected at source under section 206C or paid Page - 2 - of 6 by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one-half per cent for every month or part of a month 96 comprised in the period,- (i) from the 1st day of April of the assessment year to the date on which the refund is granted, if the return of income has been furnished on or before the due date specified under sub-section (1) of section 139; or (ii) from the date of furnishing of return of income to the date on which the refund is granted, in a case not covered under sub-clause (i): 97[Providedthat where refund arises as a result of an order passed by the Assessing Officer in consequence of an application made by the assessee under sub-section (20) of section 155, such interest shall be calculated at the rate of one- half per cent for every month or part of a month comprised in the period from the date of such application to the date on which the refund is granted;] (aa) where the refund is out of any tax paid under section 140A, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period, from the date of furnishing of return of income or payment of tax, whichever is later, to the date on which the refund is granted: Provided that no interest under clause (a) or clause (aa) shall be payable, if the amount of refund is less than ten per cent of the tax as determined under sub- section (1) of section 143 or on regular assessment;] (b) in any other case, such interest shall be calculated at the rate of 98[one-half per cent] for every month 99 or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the 99tax or penalty to the date on which the refund is granted. Explanation.-For the purposes of this clause, “date of payment of tax or penalty” means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand 1. 2[(1A) In a case where a refund arises as a result of giving effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264, wholly or partly, otherwise than by making a fresh assessment or reassessment, the assessee shall be entitled to receive, in addition to the interest payable under sub-section (1), an additional interest on such amount of refund calculated at the rate of three per cent per annum, for the period beginning from the date following the date of expiry of the time allowed under sub-section (5) of section 153 to the date on which the refund is granted:] 3[Provided that where proceedings for assessment or reassessment are pending in respect of an assessee, in computing the period for determining the additional interest payable to such assessee under this sub-section, the period beginning from the date on which such refund is withheld by the Assessing Officer in accordance with and subject to provisions of sub-section (2) of section 245 and ending 4[with the date up to which such refund is withheld], shall be excluded.] 5[(1B) Where refund of any amount becomes due to the deductor in respect of any amount paid to the credit of the Central Government under Chapter XVII-B, such deductor shall be entitled to receive, in addition to the said amount, simple interest thereon calculated at the rate of one-half per cent for every month or part of a month comprised in the period, from the date on which- (a) claim for refund is made in the prescribed form; or (b) tax is paid, where refund arises on account of giving effect to an order under section 250 or section 254 or section 260 or section 262, Page - 3 - of 6 to the date on which the refund is granted.] (2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee 5[or the deductor, as the case may be,] whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable 6[under sub-section (1) or (1A)] 7[or (1B)], and where any question arises as to the period to be excluded, it shall be decided by the 8[Principal Chief Commissioner or] Chief Commissioner or 8[Principal Commissioner or] Commissioner whose decision thereon shall be final. (3) Where, as a result of an order under 9[sub-section (3) of section 115WE or section 115WF or section 115WG or] 10[sub-section (3) of section 143 or section 144 or] section 147 or section 154 or section 155 or section 250 or section 254 or section 260 or section 262 or section 263 or section 264 or an order of the Settlement Commission under sub- section (4) of section 245D, the amount on which interest was payable under sub-section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly. (4) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989, and subsequent assessment years :] 11[Provided that in respect of assessment of fringe benefits, the provisions of this sub- section shall have effect as if for the figures “1989”, the figures “2006” had been substituted.]….”
5.0 A perusal of the above statutory provisions indicate that a taxpayer is entitled for grant of interest on its refund from the first date of the respective assessment year till the date of grant of refund. There is no controversy that the date of grant of refund shall be date of credit into assessee’s bank account. It is an undisputed fact on record that the assessee has not been granted by the Revenue interest u/s 244A till the date of grant of refund i.e. 23.11.2023. The Revenue has defended its action on the premise of the assessee not timely complying with the re- refund / re-issue request proposed by CPC. The Ld.DR has also raised the issue of different bank accounts. The Ld.Counsel for the assessee
Page - 4 - of 6 has vehemently argued that no blame can be attached to the assessee as banks have certified that there was no mismatch etc in its case. It has submitted that consequently there was no case with it, for complying with the re-refund / re-issue request proposed by CPC. In support of its contentions, the Ld.Counsel has filed before us a small paper book. Be that as it may be we are of the considered view that in the interest of justice, the issue can be resolved by a careful consideration by the Revenue of the facts on record. We therefore deem it appropriate to set aside the order of lower authorities and direct the Ld.AO to conduct a limited verification as to the facts of case and decide as to whether any blame of not timely complying with the re-refund / re-issue request proposed by CPC can be shouldered upon the assessee. Accordingly, the Ld.AO may examine in the light of evidences placed by the assessee as also any further enquiry deemed necessary to be conducted with the bank as to whether the assessee was actually required to comply with the re-refund / re-issue request proposed by CPC. The matter may be concluded in accordance with law and after giving due opportunity of being heard to the assessee. The assessee shall comply with the statutory notices issued by the Ld.AO and will be at liberty to produce all evidences, including those produced before us, in support of its contentions. Accordingly, all the grounds of appeal raised by the assessee are allowed for statistical purposes. Page - 5 - of 6. Sd/- Sd/- (जॉजज जॉजज के) (अधिताभ शुक्ला) (GEORGE GEORGE K) (AMITABH SHUKLA) उपाध्यक्ष / vice president लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 8th , Aug-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF
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