Home › Income-Tax Act › Maruti Suzuki India Ltd. v. CIT (2020) 185 ITD 109 / 194 DTR 177 / 207 TTJ 641 (Delhi)(Trib.)

Maruti Suzuki India Ltd. v. CIT (2020) 185 ITD 109 / 194 DTR 177 / 207 TTJ 641 (Delhi)(Trib.)

S. 244A : Refund-Interest on refunds-Prior to 1-6-2016-Self assessment tax-Tax deduction at source-Entitle to interest. [S.156, 254(1)]

The assessee filed its return of income and claimed refund in respect of previous year ended 31-3-1999. The Assessing Officer did not allow interest under section 244A(1)(a) on the amount of Rs. 14.59 crores as the refund was less than 10 per cent of the tax determined under section 254 read with section 143(3).CIT (A) confirmed the order of the AO. Tribunal held as under; keeping in view the entire facts and circumstances of the case, the provisions of the Act as at 1989 and 2016, judgments of the various High Courts and Apex it is held as under:

  • Where refund of any amount becomes due denotes refund arising out of advance tax under section 207, TCS under section 206, TDS under section 195, all credits under section 199, Taxes paid as specified under section 156 and self-assessment tax.
  • Before 1-6-2016, no interest would be paid if the amount of refund is less than 10 per cent of the taxes determined in case the refund is out of the taxes paid other than self assessment tax.
  • Before 1-6-2016, in the case of refund arising out of self-assessment tax, interest would be calculated on the entire self-assessment tax refunded from the date of payment of S.A. tax.
  • After 1-6-2016, no interest would be paid if the amount of refund is less than 10 per cent of the taxes determined whether it is under section 140, under section 156, under section 195, under section 199, under section 206 and under section 207.
  • Where refund of ‘any amount’ [244A(1)] due connotes the refund of taxes paid by the assessee.
  • Where refund of ‘any amount’ [244A(1)] is due, the assessee is entitled to simple interest. The simple interest would be calculated at the prescribed percentage after determining the refund due and paid along with the principle.
  • Even, ‘a single day’ should be considered as a part of the month for the purpose of computation of interest.

Accordingly the Tribunal directed the Assessing Officer to pay interest on the refund eligible in accordance with the proviso to section 244A(1)(a) with regard to the advance tax paid. With regard to the self-assessment tax paid, it is hereby held that the assessee is eligible for interest on the total amount of refund in accordance with provision of section 244A(1)(b) as the bar contained in proviso to clause (a) to section 244A(1) is not applicable to the instant cases (AY. 1999-2000,  1994-95).