EVEREST BUSINESS ADVISORY INDIA PVT LTD,GURGAON vs. ACIT CIRCLE 7(1), NEW DELHI

The assessee had filed its return of income declaring total income of Rs. 1,29,13,380/- on 31.10.2007. The return was processed u/s 143(1) on 20.02.2009 determining refund of Rs. 33,64,080/- including interest u/s 244A. The refund was issued to assessee however, not credited to the bank account of assessee as the assessee. AO claims that account of assessee stood blocked. The assessee has filed application befoe the AO and submitted that the assessee has not received the refund determined for the year under consideration. In the application, the sought interest on refunds as refunds were against order u/s 143(1) which have been credited to assessee's account in the year 2021 without interest. The assessee also filed a CPGRAM in this respect earlier, which was disposed off by the AO with the remarks that there are different reasons for blockage of refund like bank account mismatch, bank name mismatch, PAN mismatch etc. Assesssee had claimed that there was no such mismatch ever happened in assessee's case as refund was never credited to assessee prior to 2021. This is clear from NSDL summary attached with this grievance. Further, no refund cheque was ever sent by SBI banker this is also clear from NSDL summary which shows refund cheques sent also in reference section of refund status. Further, assessee has never received any refund cheque from department pertaining to AY 2007-08. The reasons for non payment of interest on refund given by AO are generic and not applicable to facts of the case. Moreover, the Page 3 of 7

Now the admitted case of Revenue is that the return was processed on 20.02.2009 U/s 143(1) and refund of Rs. 3364080/- was determined. This refund includes interest of Rs. 346967/-. Thus, while determining the refund order interest U/s 244A was already allowed. In the order U/s 143(1) credit of TDS claimed of Rs. 735018/- was not allowed. However, the same was allowed U/s. 254 of IT Act, 1961. Thus, from the facts it is clear that refund was determined by allowing interest U/s 244A.

The AO while deciding this application has observed that;

We are of considered view that CIT(A) has fallen in error in making observation that the assessee has sought rectification of the determination of interest under section 244A of the Act while in fact the question was the period for which the interest should have been paid. It was not the question of making a conclusion after a long process so as to be outside the purview of section 154 of the Act. But, merely rectification of a clerical nature arising out of mistake in calculation of period for which interest is payable to assessee. It is settled proposition of law that if interest is reduced by virtue of Sub-section (3) of Section 244A on account of assessment under Section 143(3), the interest granted in earlier year gets substituted and it is the reduced amount of interest that would form part of income of that year. Thus, it would amount to mistake rectifiable under Section 154 of the Act. Reliance can be placed on Avada Trading Co. (P.) Ltd. vs Assistant Commissioner Of Income-Tax decided [2006]284ITR73(MUM). This certainly leads to conclusion that Section 154 proceedings can be held in matters of calculation of the interest component

Consequently the appeals are allowed and the assessing officer is directed allow the interest under section 244A of the Act up to the respective dates of credit of refunds in the account of assessee.