| COURT: | Supreme Court |
| CORAM: | A. M. Khanwilkar J, Dinesh Maheshwari J |
| SECTION(S): | 244A |
| GENRE: | Domestic Tax |
| CATCH WORDS: | 244A Interest |
| COUNSEL: | Akshat Shrivastava |
| DATE: | December 12, 2019 (Date of pronouncement) |
| DATE: | December 21, 2019 (Date of publication) |
| AY: | - |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 244A: Interest on refund is compensation for unauthorized retention of money by the Department. When the collection is illegal & amount is refunded, it should carry interest in the matter of course. There is no reason to deny payment of interest to the deductor who had deducted tax at source and deposited the same with the Treasury. The Department is directed to pay interest as prescribed u/s 244-A at the earliest (UOI vs. Tata Chemicals 363 ITR 658 (SC) followed) | |
When the said amount is refunded it should carry interest in the matter of course. As held by the Courts while awarding interest, it is a kind of compensation of use and retention of the money collected unauthorizedly by the Department. When the collection is illegal, there is corresponding obligation on the Revenue to refund such amount with interest inasmuch as they have retained and enjoyed the money deposited
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