Case Note & Summary
The Revenue appealed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal directing the Assessing Officer to grant interest under Section 244A to the assessee, M/s. Larsen & Toubro Ltd. The assessee had filed its return of income for assessment year 2001-01 on 28 November 2000, declaring an income of Rs.89.75 crores, and later filed a revised return on 14 March 2002 showing Rs.80.75 crores. Assessment proceedings began with a notice under Section 143(2) on 18 November 2002, and the assessment order was passed on 31 March 2003, determining income at Rs.97.09 crores under Section 115JA. During the assessment proceedings, the assessee submitted TDS certificates amounting to Rs.1,44,34,030/-, which had not been filed with the original or revised return. The Assessing Officer allowed interest under Section 244A from 1 April 2001 on the refund of TDS until the date of refund. The Revenue contended that since the TDS certificates were not filed with the return, the delay in processing the refund was attributable to the assessee, and therefore interest should be denied under Section 244A(2). The Tribunal rejected this contention and upheld the grant of interest. The High Court dismissed the Revenue's appeal, holding that Section 244A(2) was not attracted because the proceeding resulting in the refund was not delayed for reasons attributable to the assessee. The court noted that the tax was deducted at source and deposited in the exchequer in time, and the mere fact that the TDS certificates were submitted during assessment rather than with the return did not justify denial of interest. The appeal did not raise any substantial question of law and was dismissed.
Headnote
A) Income Tax - Interest on Refund - Section 244A of the Income Tax Act, 1961 - Delay in Furnishing TDS Certificates - The assessee filed TDS certificates during assessment proceedings, not with the return. The court held that since tax was deducted and deposited in time, interest under Section 244A cannot be denied solely on the ground that certificates were not filed with the return. Section 244A(2) was not attracted as the delay in refund was not attributable to the assessee. (Paras 1-3)
Issue of Consideration
Whether the Tribunal was correct in directing the Assessing Officer to grant interest under Section 244A of the Income Tax Act, 1961, even though TDS certificates were not filed with the return of income but were submitted during assessment proceedings.
Final Decision
The appeal is dismissed. No substantial question of law arises.
Law Points
- Interest under Section 244A of the Income Tax Act
- 1961 cannot be denied merely because TDS certificates were not filed with the return
- if tax was deducted and deposited in time
- Section 244A(2) exclusion applies only if delay in refund is attributable to assessee
Case Details
2010 LawText (BOM) (06) 85
Income Tax Appeal (L) No.3013 of 2009
Dr. D.Y. Chandrachud, J.P. Devadhar
Mr. Vimal Gupta for appellant, Mr. J.D. Mistry, Senior Advocate with A.K. Jasani for respondent
The Commissioner of Income Tax-2, Mumbai
M/s. Larsen & Toubro Ltd.
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Nature of Litigation
Appeal by Revenue under Section 260A of the Income Tax Act, 1961 against Tribunal order directing grant of interest under Section 244A.
Remedy Sought
Revenue sought to set aside the Tribunal's order directing the Assessing Officer to grant interest under Section 244A.
Filing Reason
Revenue contended that interest under Section 244A should not be granted because TDS certificates were not filed with the return of income, causing delay attributable to the assessee.
Previous Decisions
The Income Tax Appellate Tribunal directed the Assessing Officer to grant interest under Section 244A.
Issues
Whether the Tribunal was correct in directing the Assessing Officer to grant interest under Section 244A of the Income Tax Act, 1961, even though TDS certificates were not filed with the return of income but were submitted during assessment proceedings.
Submissions/Arguments
Revenue argued that since TDS certificates were not filed with the return, the delay in processing the refund was attributable to the assessee, and therefore interest under Section 244A should be denied under Section 244A(2).
Assessee argued that tax was deducted and deposited in time, and the mere late filing of certificates does not attract Section 244A(2).
Ratio Decidendi
Interest under Section 244A of the Income Tax Act, 1961 cannot be denied merely because TDS certificates were not filed with the return of income, if the tax was deducted and deposited in time. Section 244A(2) applies only when the proceeding resulting in the refund is delayed for reasons attributable to the assessee, which was not the case here.
Judgment Excerpts
Section 244A (2) provides that in the event the proceeding resulting in refund has been delayed for reasons attributable to the assessee, the period of delay so attributable shall be excluded from the period for which the interest is payable. In the present case, Section 244 A(2) is clearly not attracted.
The Tribunal is correct in holding that since the benefit of TDS has been allowed to the assessee, interest under Section 244A could not be denied only on the ground that the TDS certificates were not furnished with the return of income.
Procedural History
The assessee filed return on 28 November 2000 and revised return on 14 March 2002. Assessment proceedings began on 18 November 2002, and assessment order was passed on 31 March 2003. TDS certificates were submitted during assessment. The Assessing Officer granted interest under Section 244A. The Revenue appealed to the Tribunal, which upheld the grant of interest. The Revenue then appealed to the High Court under Section 260A.
Acts & Sections
- Income Tax Act, 1961: Section 260A, Section 244A, Section 244A(2), Section 143(2), Section 115JA
