Intimation u/s 143(1) does not amount to ‘Grant of Refund’: ITAT directs to pay Interest till Actual Date of Income Tax Refund [Read Order]

The Income Tax Appellate Tribunal (ITAT), Jaipur bench has held that an intimation under section 143(1) of the Income Tax Act, 1961 does not amount to grant of refund and therefore, the assessee is eligible to receive simple interest till the date of actual refund.

The assessee, M/s. Mangalam Arts filed its return of income claiming refund of Rs. 5,63,13,820/-. The ld. A/R of the assessee submitted that the assessee received an intimation under section 143(1) of the Act dated 21.11.2019 determining the refund at Rs. 5,53,50,676/- and interest under section 244A thereon was calculated at Rs. 55,35,060/- for the period from 01.04.2018 to 30.11.2019 and thus refund of Rs. 6,08,85,736/- was determined. This refund was granted to the assessee on 11.06.2020.

The assessee contended that as per section 244A where refund of any amount becomes due to the assessee, he is entitled to receive simple interest thereon from 1st day of April, of the assessment year to the date on which refund is granted.

After considering arguments from both sides, the bench comprising Shri Sandeep Gosain, JM & Shri Rathod Kamlesh Jayantbhai, AM held that “Simply calculating the interest till the month on which intimation under section 143(1) is issued do not amount to grant of refund. Refund is granted when the amount is actually paid to the assessee. In the case of the assessee, the refund was actually paid to the assessee on 11.06.2020. Therefore, the assessee is eligible for interest under section 244A from April, 2018 to June, 2020 i.e. for 27 months and not from April, 2018 to November, 2019 i.e. 20 months.”

Analysing the provisions of section 244A, the Tribunal concluded that “the above facts and rules narrated above, we direct the AO to allow interest to the assessee upto the actual date of refund i.e. upto 11.06.2020. The matter is restored to the file of the AO.”

To Read the full text of the Order CLICK HERE

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