The Tribunal referred to the provisions of sub-sections (1) and (2) of Section 244A of the Act and held that the stand of the assessing officer was incorrect and directed the AO to grant interest u/s 244A from 1st April itself. [Section 244A(1)(a)(ii)]. Ltd.’ (supra) has defined the term ‘refund of any amount becomes due to the assessee” and has held that on the date of payment of the refund along with interest, the withheld or the unpaid amount on the said date becomes amount due to the assessee upon which the assessee is entitled to interest u/s 244A of the Act from the date of withholding till the date of payment. Prior to insertion, section 244A of the Act provided that an assessee is entitled to receive interest on refund arising out of excess payment of advance tax, tax deducted or collected at source, etc. Then. No. for the same assessee whereby refund has been directed to be calculated from the first day of the April of the assessment year to the date on which refund voucher is signed. 244A(2) of the Act the AO could not do so as it was outside of his jurisdiction and the question of exclusion of any period for the purpose of grant of interest u/s 244A(1) of the Act was necessarily and mandatorily to be decided either by the Chief Commissioner of Income Tax or Commissioner of Income Tax. Vs. Jt. [Section 244A(1)(b)]. Para 10.11 describes the meaning of the expression “month or part of a month” used in sections 234A and 234B in which it is categorically stated that even where the delay is for part of a month say even for 1 day, interest at 2% (p.m.) will be charged. Hence, the recovered interest is now refundable to the assessee. Considering the circumstances of the case, we are also of the view that it is a fit case for awarding costs to the assessee under s. 255(2B) of the Act. The interest granted u/s 244A on the refund amount is taxable in the hands of the assessee under the head ‘Income from other sources’. In fact, the cheque issued by the Government is known as “Income Tax Refund Order”, . Under section 244A(1)(a), an assessee is entitled to receive interest on refund out of any tax collected at source, tax deducted at source or advance tax paid from the 1st day of April of the assessment year to the date on which the refund is granted. People who submitted their 2019 income tax returns by July 15 are eligible for interest payments of up to 5% on their tax refunds. [, Section 244A(1B) related to refund of TDS. 214, 243 and 244 as clarified by the CBDT in its. 1414/Del/2011) (Delhi-Trib. Suppose, in a case, the assessee has made certain claims before the assessing officer during assessment proceedings u/s 143(3) and the same is accepted by the AO and the same was not claimed in the return, then the amount of refund will increase as compared to the amount of refund claimed in the ITR by the assessee. Accordingly, the entire interest received is subject to tax in the first instance. A similar proposition has been laid down by ITAT Mumbai in the case of Tolani Education Foundation vs ACIT in ITA Nos. If there is delay beyond the period of three months, IT Act provided for payment of interest to the assessee by the Central Government. 9/2015 dated 09.06.2015 for condonation of delay in filing returns for claiming refund and returns claiming carry forward of loss and set-off thereof under section 119(2)(b) of the Act. The judgment of Tata Chemicals (supra) also supports this view. It is crystal clear that in case refund is claimed in the return of income, the interest is payable from the 1st day of the assessment year. Failure to do so will be viewed adversely by the board and the officer concerned will be held personally accountable, inviting appropriate action from the board. Payment of interest by the department for delay in grant of refund due to the assessee. Cumulative Growth of a $10,000 Investment in Stock Advisor, The IRS Will Pay Interest on Tax Refunds Issued After April 15 -- Even for Filers Who Haven't Submitted Their Taxes Yet @themotleyfool #stocks, How the 52-Week Saving Challenge Could Make You Much Richer by the End of 2021, 3 Mortgage Refinance Strategies to Consider in 2021, Here's What to Know About Pfizer's 'Extra' COVID Vaccine Doses, 3 Financial Gifts to Give Your Kids This Holiday Season, Copyright, Trademark and Patent Information. It happens many times that tax is deducted in one year but the credit of TDS u/s 199 of the Act is given in another assessment year. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. 2. Even in such a situation, the Court held that sub-section (2) of Section 244A would have no applicability. In the affidavit filed on 29th January, 2013, the respondents have stated as under:-, ‘Where an assessee makes a mistake in the claim 0f TDS in the e-return and the return is processed and a demand is raised and subsequently, the assessee rectifies the mistake in the claim and files an online rectification application, the same is processed and on any excess TDS is refunded, the interest under section 244A is granted as per the I.T. 9% on 80,000. It is a settled proposition of law that interest on refund has to be granted upto the date of issue of the refund voucher. 3,000 would meet the ends of justice and we hereby direct the respondent to deposit the cost with the Dy. Interest u/s 244A has to be calculated on the tax refund without reducing the interest granted earlier on a refund - A case of increase or reduction of tax amount as per section 244A(3), from 01.04.2017 to 30.03.2020 = 36 months @ 0.5% p.m. comes to 18%, Abudhabi Commercial Bank Ltd vs. DCIT in ITA No.5136/Mum/2009. 12,000 is to be claimed in each of the three assessment years for AYs 2019-20, 2020-21 and 2021-22. 29.0 So much is clearly emerging from the plain language used in the statutory provisions noticed by us. This sub-section (1A) provides that where a refund arises out of appeal effect being delayed beyond the time prescribed under sub-section (5) of section 153, the assessee shall be entitled to receive, in addition to the interest payable under sub-section (1) of section 244A, additional interest on such refund amount calculated at the rate of 3 per cent per annum, for the period beginning from the date following the date of expiry of the time allowed under section 153(5) to the date on which the refund is granted. The Court finally allowed the appeal in favour of the assessee and directed the department to pay the interest on the unpaid interest. In this case, the decision of Kerala High Court in the case of, K. Devayani Amma Vs. DCIT (2010) 328 ITR 10 (Ker). It is held that the interest needs to be calculated on the refund due to the assessee without reducing the interest under section 244A which is part of the refund earlier granted. 10.11 Meaning of the expression “month or part of a month” used in sections 234A and 234B - Under the provisions of sections 234A and 234B, interest is charged at 2% per month or part of a month. The intimation under s. 143(1)(a) and the refund order dt. Since in the present case delay of 4 months in filing the return is attributable to the assessee, interest shall not be payable to him for this period. In the present case the respondent-assessee had voluntarily included the amount received on account of transport subsidy as taxable income. 33A : Cases in which the ITO or the Asstt. 2/2007 dated 28th March 2007 has reminded all Assessing officers that while granting refund to the assessees, care should be taken to ensure that any interest payable under section 244A on the amount of refund due should be granted simultaneously with the grant of refund, no case any omission or delay in the grant of such interest. Changes in the historic rate of interest on the amount of refund under section 244A. In this case, the Delhi High Court has followed the decision of the Supreme Court in case of, Hind Wire Industries v. CIT (1995) 212 ITR 639 (SC), Adjustment of interest payment on income tax dues against the interest income on tax refunds. 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