Re-calculation of Refund Receivable to Claim Interest on Refunds: ITAT Condones Delay of 98 Days [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) restored the matter to the file of the Assessing Officer (AO) for proper verification and calculation of refund receivables to grant interest to the assessee under Section 244A of the Income Tax Act, 1961.

In this case the total income of the assessee  Kapilaben Kanjibhai Patel Oral Specific Deferred Family Trust, was determined as at Rs.Nil for the Assessment Year (A.Y.) 1982-83 and the assessee was granted refund of Rs.31,180.

The assessee filed a rectification application requesting to rectify the mistakes apparent on record. The AO after taking cognizance of the rectification application, passed an order under Section 154 of the Income Tax Act, determining the total income at Rs. Nil.

Being aggrieved by the rectification order under , the assessee filed appeal before the Commissioner of Income Tax (Appeals) [CIT (A)]. The CIT (A) dismissed the appeal rejecting the assessee’s claim on interest refund.

The assessee filed an appeal before the ITAT by a delay of 98 days, and the Authorized Representative of the assessee Hemanshu Shah, submitted that the said refund receivable was wrongly calculated and thus the assessee rightly claimed additional compensation on delayed grant interest under Section 244A of the Income Tax Act, and also stated that refund receivable is to be calculated by determining the refund receivable including interest on refund as reduced by the refund already issued.

Furthermore, contended that the amount of refund comes to Rs.3,45,530 till April 2020 and hence refund was short granted by Rs.2,25,356 including interest till November 2021. Thus, the AR submitted that the CIT(A) erred in rejecting the assessee’s claim on interest refund.

The Departmental Representative  Sanjay Jain, submitted that the AO has rightly rejected the rectification application under Section 154 of the Income tax Act filed by the assessee and the refund granted by the Department at Rs.1,35,627 was granted as per law, and thus relied upon the AO and the order of the CIT(A).

A Single Bench comprising of Ms. Suchitra Kamble, Judicial Member condoned the delay of 98 days as the reasons set out in the application was genuine, and observed that the assessee is not claiming interest on interest but claiming the refund and the date on which the refund was granted and received up till that period the interest which the trust is entitled to.

The Tribunal remanded back the matter to the file of the AO for proper verification and calculation which was placed by the assessee before the Revenue authorities in consonance with Section 244A of the Income tax Act. Thus, the assessee was given an opportunity of hearing by following the principles of natural justice.

To Read the full text of the Order CLICK HERE

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