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Income Tax Appellate Tribunal, DELHI BENCHES : E : NEW DELHI
Before: SHRI R.S. SYAL & SHRI LALIET KUMAR
Date of Hearing : 09.10.2018 Date of Pronouncement : 10.10.2018 ORDER PER R.S. SYAL, VP: This appeal filed by the assessee is directed against the order passed by the CIT(A) on 17.09.2015 in relation to the assessment year 1997-98.
Briefly stated, the facts are that an order u/s 250 read with sections 143(3) and 163 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) was passed on 08.04.2013 giving effect to the order passed by the CIT(A) dated 21.12.2012 allowing the credit for TDS of Rs.51,56,400/- on royalty payable reversed for the period 01.01.1997 to 31.03.1997. The assessee filed a letter dated 21.04.2014 requesting to grant interest u/s 244A of the Act from the period 01.04.1997 till the grant of refund. The Assessing Officer rejected the assessee’s application u/s 154 of the Act holding that no refund was claimed by the assessee up to 28.03.2000, being, the date of assessment order. It was further observed that the amount of refund related to refund of TDS which was deducted by Whirlpool of India Ltd. u/s 195 of the Act from the royalty amount credited in respect of the non-resident parent company i.e., Whirlpool Corporation, USA (WC-USA).
The Assessing Officer held that the assessee was not entitled to interest on refund in view of CBDT Circular No.7/2007 dated 23.10.2007. The assessee remained unsuccessful before the ld. first appellate authority.
Having heard both the sides and perused the relevant material on record, it is observed that there are two different entities, namely, WC-USA 2
which is the assessee under consideration, being, represented through Whirlpool of India Ltd. u/s 163 of the Act. Whirlpool India Ltd., made deduction of tax at source on the royalty payments to WC-USA. WC-USA initially did not file its return. Such return was filed only on 28.04.1999 after a notice u/s 163(2) of the Act was issued and by such time, the due date for filing belated return had also expired. Thus, it is manifest that the order u/s 154 has been passed by the Assessing Officer in the name of the deductee WC-USA (through Whirlpool India Ltd., as an agent u/s 163 of the Act). The refund arose in the hands of WC-USA because of the order of the ld. CIT(A). In this view of the matter, it becomes apparent that the assessee in question, claiming refund, is deductee WC-USA and not the deductor Whirlpool of India Ltd. Reliance of the Assessing Officer on para 5 of the CBDT Circular No.7/2007 dated 23.10.2007 is not germane to the issue because this para gets applied when the refund is claimed by the person making payment u/s 195, i.e., deductor and not the deductee. As it is a case of the deductee claiming refund, normal provisions of section 244A apply in so far as the claim of interest on refunds is concerned.
Sub-section (1) of section 244A provides that where a refund of amount becomes due to the assessee under this Act, he shall, subject to the provisions of this Act, be entitled to receive, in addition to the said amount, simple interest thereon in the manner laid down in the provision. Sub- section (2) of section 244A provides that if the proceedings resulting in the refund are delayed for the reasons attributable to the assessee, 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 under sub-section (1) of section 244A. Adverting to the facts of the instant case, it is seen that though deduction of tax at source was made by Whirlpool of India Ltd. in the period relevant to assessment year 1997-98, but, the assessee-deductee did not file its return of income voluntarily. Such a return was filed on 28.04.1999 after notice u/s 163(2) was issued. Even in the said return, no claim of TDS refund was made and the corresponding income was also not shown. The credit was claimed during the assessment proceedings and the assessment order was passed on 28.03.2000. Thus, it becomes apparent that though the assessee is entitled to interest u/s 244A(1), but, the delay in the period up to the passing of the assessment order on 28.03.2000, is attributable to it for the reasons recorded hereinabove. We, thus, hold that the assessee is entitled to interest on refund u/s 244A of the Act from 28.03.2000 i.e., the date of the assessment order till the granting of the refund.
In the result, the appeal is partly allowed.
The order pronounced in the open court on 10.10.2018.