LIC HOUSING FINANCE LIMITED,MUMBAI vs. ACIT, MUMBAI

ITA 6974/MUM/2024Status: DisposedITAT Mumbai12 February 2026AY 2007-0826 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeals, directing the AO to grant interest under Section 244A of the Income-tax Act. The Tribunal respectfully followed the authoritative pronouncements of the Hon'ble Supreme Court in Sandvik Asia Ltd. v. CIT and CIT v. H.E.G. Ltd., and the jurisdictional High Court's decisions. The reasoning was that the interest component partakes of the character of an 'amount due' under Section 244A and becomes an integral part of the refund. The Tribunal found that the decisions relied upon by the Revenue were distinguishable and not applicable to the facts of the present case. The AO was directed to allow interest under Section 244A in accordance with the decision of the Hon'ble Apex Court in H.E.G. Ltd. The common grounds taken by the assessee in all three appeals were allowed. No issue was expressly left undecided.

What were the facts?

The assessee, LIC Housing Finance Ltd., filed appeals against orders of the CIT(A) for Assessment Years (AY) 2005-06, 2006-07, and 2007-08. These appeals challenged the denial of interest on a tax refund of Rs. 11,16,71,928/-. The refund arose from a settlement under the Direct Tax Vivad Se Vishwas (DTVSV) Act, 2020. The assessee claimed interest of Rs. 1,11,67,193/- at 6% under Section 244A of the Income-tax Act, 1961, citing a delay of over 20 months in issuing the refund. The Assessing Officer (AO) and the CIT(A) rejected this claim, holding that Section 244A was not applicable to refunds arising from the DTVSV Act, which is a relief scheme.

What were the issues?

1. Whether the assessee is entitled to interest under Section 244A(1)(b) of the Income-tax Act, 1961, on a tax refund determined under the Direct Tax Vivad Se Vishwas Act, 2020, where the refund was issued after a delay of more than 90 days from the Order Giving Effect (OGE). Assessee's contentions: - The refund is effectively due under the Income-tax Act, not solely under the DTVSV Act, as the DTVSV Act is for dispute resolution and does not determine tax payable or refundable. The refund amount is computed in accordance with the Act. - Section 244A(1)(b) applies as the refund is due under the Act. - Relied on judicial decisions including Union of India v. Tata Chemicals Ltd., UPS Freight Services India (P.) Ltd. v. DCIT, and Dwejesh Acharya v. Income Tax Officer. - Cited Section 153(5) of the Act for a three-month timeline for OGE and sub-section (1A) to 244A for additional interest for delays. - Mentioned the Income Tax Department's Citizens Charter regarding refund timelines. Revenue's contentions: - The CIT(A) correctly rejected the claim, observing that Section 244A(1)(b) provides for refunds due under the Act (e.g., assessment orders, rectification, appeal effect orders), whereas the impugned refund arose under the DTVSV Act, a relief scheme, making Section 244A inapplicable.

Which sections of the Income-tax Act were involved?

Section 244A,Section 154,Section 153(5)

AI-generated summary — verify with the full judgment below

Before: SHRI NARENDER KUMAR CHOUDHRY

For Appellant: Shri S.Bhandari and Sri Shreyas Shah,(Adv.)
For Respondent: Shri Surendra Mohan,(Sr. DR)
Hearing: 12.12.2025Pronounced: 12.02.2026

Heard together (3 matters)

ITA No.6972/MUM/2024
ITA No.6973/MUM/2024
ITA No.6974/MUM/2024

Read from the judgment's own cause title. This page is filed under one of them.

PER PRABHASH SHANKAR [A.M.] :-

The above captioned appeals have been filed by the assessee against the orders of even date passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to the order passed u/s. 154 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Years [A.Y.] 2005- 06, 2006-07 and 2007-08. Since the issues are com

The order continues below.

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