Dismissing the appeal of the revenue the Court held that, the interest on the delayed refund was part of the principal amount and the delayed interest included the interest for not refunding the principal amount. The net of interest partook of the character of “amount due” under section 244A. The Tribunal was right in directing the Department to pay compensation in the form of simple interest on the amount due at the rate at which the assessee otherwise would have been entitled to under section 244A on the delayed refund up to the date of issue of refund. Followed CIT v. H. E. G. LTD. [2010] 324 ITR 331 (SC). (AY. 1996-97 to 1999-2000)
PCIT v. Ambuja Darla Kashlog Mangoo Transport Co-Operative Society (2020) 428 ITR 94 / 269 Taxman 618/ 317 CTR 363 / 195 DTR 99 (HP)(HC)
S. 237 : Refund – Delay in refund of excess of tax deducted at source- Interest on delayed refund becomes part of principal amount and also includes interest on delayed refund-Department was directed to pay compensation in form of simple interest on amount due. [S. 243, 244A(2)]