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Facts
The assessee filed its return for A.Y. 2017-18, claiming a refund. While the refund amount was determined and revised multiple times through processing u/s 143(1), assessment u/s 143(3), and rectification u/s 154, the assessee's grievance was that interest u/s 244A was allowed only until the date of intimation u/s 143(1) (March 2019) instead of the actual date the refund was granted (March 2020 or July 2020).
Held
The Tribunal held that, as per Section 244A, the assessee is entitled to interest from the 1st day of April of the assessment year until the date the refund is actually granted. Since the refund was granted on 23rd March 2020 via an order u/s 154, the interest should be computed up to this date. The matter was set aside to the Assessing Officer with a direction to re-compute the interest accordingly and provide the working to the assessee.
Key Issues
The key issue was the period for which interest under Section 244A of the Income Tax Act should be granted – specifically, whether it should extend until the actual date of refund payment or only until the date of earlier intimations/orders.
Sections Cited
244A, 143(1), 143(3), 154
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
(�नधा�रण वष� / Assessment Year : 2017-18) बनाम/ Elsamex Maintenance Dy. Commissioner of Services Limited Income Tax Vs. 1207-1210, Shapath V, Circle, Gandhinagar Beside Hotel Crowne Plaza, S. G. Highway, Prahladnagar, Ahmedabad, Gujarat - 380015 �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AADCE5042Q (Appellant) .. (Respondent) अपीलाथ� ओर से /Appellant by : Shri Bhupal Rupelli & Ms. Deepika Dirgreja, ARs. ��यथ� क� ओर से/Respondent by : Shree Veerbadram Vislavath, Sr. DR Date of Hearing 25/03/2025 Date of Pronouncement 27/03/2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM:
This appeal is filed by the assessee against the order of the Commissioner of Income Tax(Appeals), Addl./JCIT(A)-2, Nagpur, (in short ‘the Addl. CIT(A)’), dated 30.09.2024 for the Assessment Year 2017-18.
The only ground taken in this appeal is as under:
“1. On the facts and circumstances of the case in law, the Ld. Addl / Joint Commissioner of Income-tax (Appeals) / Assessing Officer have erred in not granting proper interest under section 244A of the Act.
Maintenance Services Limited vs. DCIT] A.Y. 2017-18 - 2 – The Ld. Addl / Joint Commissioner of Income-tax (Appeals) / Assessing Officer erred in granting interest only for a period of 24 months instead of granting for 40 months beginning from 1 April 2017 to 2 July 2020 i.e. date of receipt The Appellant craves leave to add, alter, supplement, vary, amend, withdraw or otherwise modify the Grounds of Appeal mentioned herein and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing.”
3. Shri Bhupal Rupelli, Ld. AR of the assessee explained that the assessee had filed its return of income for A.Y. 2017-18 on 30.11.2017 declaring total income of Rs.8,70,78,910/-. As per return, the assessee had claimed refund of Rs.3,78,05,460/-. The return of assessee was processed under Section 143(1) of the Income Tax Act, 1961 (in short ‘the Act’) on 14th March, 2019 wherein refund of Rs.3,69,87,366/- was determined on which interest of Rs.44,38,484/- u/s.244A of the Act was computed by the system and the total refund eligible to the assessee was Rs.4,14,25,850/-. However, no refund was issued to the assessee by the systems. Thereafter, the assessment u/s.143(3) of the Act was completed on 16th December, 2019 as per which total refund claim of Rs.4,18,91,080/- (including interest of Rs.44,91,993/- u/s.244A of the Act) was determined. Thereafter, the assessee had filed an rectification application u/s.154 of the Act, which was decided on 23rd March, 2020 and the amount of refund finally determined vide order u/s.154 of the Act was Rs.4,22,73,230/- (including interest of Rs.45,40,386/- u/s.244A of the Act). The grievance of the assessee is that the interest u/s.244A of the Act has been allowed till 14th March, 2019 i.e. the date of intimation u/s.143(1) of the Act only whereas the assessee was eligible to interest u/s.244A of the Act till the date of credit of the refund in its bank account, which was 2nd July, 2020. The Ld. AR Maintenance Services Limited vs. DCIT] A.Y. 2017-18 - 3 – submitted that this issue was raised before the Ld. Addl. CIT(A) vide e-proceeding response acknowledgement dated 7th April, 2022 and an additional ground in this respect was also raised vide submission of the assessee dated 1st July, 2024. However, Ld. Addl. CIT(A) did not adjudicate this ground and the correct interest u/s.244A of the Act was not allowed to the assessee.
Per contra, Shri Veerbadram Vislavath, Ld. Sr. DR submitted that as per provision of Section 244A of the Act, the assessee was eligible for interest till the date on which the refund was granted. He, therefore, requested that the matter may be set aside to the file of the Ld. AO with a direction to re-compute the interest u/s.244A of the Act till the date of grant of refund in accordance with the provision of Section 244A of the Act.
We have carefully considered the rival submissions. It is found that as per intimation u/s.143(1) of the Act dated 14th March, 2019, total refund of Rs.4,14,25,850/- (including interest of Rs.44,38,476/- u/s.244A of the Act) was determined by the system. However, the refund was not issued to the assessee on that occasion. The refund was finally issued only after passing the order u/s.154 of the Act dated 23rd March, 2020. The assessee had filed a computation sheet for the order u/s.154 of the Act, as per which, interest of Rs.45,40,384/- was allowed u/s.244A of the Act. From the computation sheet, it is not evident as to for which period this interest was computed. The contention of the assessee is that this interest was only for the period from 1st day of April of assessment year to the date of intimation u/s.143(1) of the Act dated 14th March, 2019. As per provision Maintenance Services Limited vs. DCIT] A.Y. 2017-18 - 4 – of Section 244A of the Act, the assessee is entitled to simple interest u/s.244A of the Act for the period from 1st day of April of the assessment year to the date on which the refund is granted. Since, the refund was granted to the assessee in this case vide order u/s.154 of the Act dated 23.03.2020, the assessee was entitled to interest u/d 244A of the Act for the period from 1st day of April of the assessment year till the date of granting of refund i.e. till 23rd March, 2020. The matter is, therefore, set aside to the file of the Jurisdictional AO with a direction to allow interest u/s.244A of the Act till the date of grant of refund vide order u/s.154 of the Act i.e. till 23rd March, 2020. The AO is also directed to intimate the assessee with the working of interest allowable u/s.244A of the Act and consider the objection of the assessee, if any, in this respect; before passing the final order.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
This Order pronounced on 27/03/2025
Sd/- Sd/- (SIDDHARTHA NAUTIYAL) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 27/03/2025 S. K. SINHA True Copy आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. 2. ��यथ� / The Respondent. संबं�धत आयकर आयु�त / Concerned CIT 3. आयकर आयु�त(अपील) / The CIT(A)- 4. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,