SECTION 244A OF THE INCOME-TAX ACT, 1961 - REFUNDS -
INTEREST ON - PAYMENT OF INTEREST UNDER SECTION 244A WHEN ASSESSEE IS
NOT AT FAULT
INSTRUCTION NO. 7/2013 [F.NO.312/54/2013-OT],
DATED 15-7-2013
Hon'ble Delhi High Court vide its judgment in case of Court On its Own Motion v. UOI in W.P.(C) 2659/2012 dated 14-3-2013 [2013] 31 taxmann.com 31 (Delhi) has issued seven Mandamus for necessary action by the Income-tax Department. One Mandamus is on payment of interest under section 244A of Income-tax Act 1961 when the assessee is not at fault.
2. On this issue, the Hon'ble Court has observed as under:
"31. In the affidavit filed on 29th January, 2013, the respondents have stated as under:-
'Where
an assessee makes a mistake in the claim of 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.
Act after excluding the period of delay attributable to the assessee in
terms of sub-section (2) of section 244A of the Income-tax Act, 1961.'.
32.
An assessee can be certainly denied interest if delay is attributable
to him in terms of sub-section (2) to section 244A. However, when the
delay is not attributable to the assessee but due to the fault of the
Revenue, then interest should be paid under the said section. False or
wrong uploading of past arrears and failure to follow the mandate before
adjustment is made under section 245 of the Act, cannot be attributed
and treated as fault of the assessee. These are lapses on the part of
the Assessing Officer i.e. the Revenue. Interest cannot be denied
to the assessees when the twin conditions are satisfied and in favour
of the assessee. However, even in such cases Assessing Officer may deny
interest for reasons to be recorded in writing if the assessee was in
fault and responsible for the delay. This is the fourth mandamus which we have issued. "
3. In view of the direction of the Hon'ble Court, I am
directed to convey that in no case should interest u/s 244A of the Act
be denied to the assessee where the assessee is not at fault. The
observation of the Hon'ble High Court in Para 32 above be strictly kept
in mind while dealing with such matters.
4. I am further directed to state that the above be brought
to the notice of all officers working under your jurisdiction for
necessary and strict compliance.
