ATUL PROPERTIES ,MUMBAI vs. ACIT, CIRCLE 24(1), MUMBAI

Facts

The assessee appealed an order confirming the AO's decision to grant short interest under Section 244A of the Income Tax Act. The AO had granted a refund with interest, but the assessee contended that the interest calculation was incorrect, particularly regarding interest on self-assessment tax and additional interest for delay. A rectification application was filed, but no further interest was granted.

Held

The Tribunal noted that the issue was squarely covered by previous decisions, including those of the ITAT and the Delhi High Court in India Trade Promotion Organization Vs. CIT. The Tribunal followed these precedents, holding that when a partial refund is made, the revenue is liable to pay interest on the balance outstanding amount, including interest on interest, until the full amount is paid.

Key Issues

Whether the Assessing Officer (AO) and the CIT(A) correctly computed the interest payable under Section 244A of the Income Tax Act, particularly when a partial refund was granted.