December 2022

41. Interest granted u/s 244A cannot be withdrawn by the AO in an order passed u/s 154 by holding that the proceedings resulting in refund were delayed for reasons attributable to the assessee.

By Jagdish Punjabi, Chartered Accountant
Devendra Jain, Advocate

Reading Time 3 mins

Grasim Industries Ltd. vs. DCIT
TS-813-ITAT-2022(Mum.)
A.Y.: 2007-08
Date of order :18th October, 2022
Section: 244A

41. Interest granted u/s 244A cannot be withdrawn by the AO in an order passed u/s 154 by holding that the proceedings resulting in refund were delayed for reasons attributable to the assessee.

FACTS

In the course of appellate proceedings before the Tribunal, in an appeal preferred by the assessee, the assessee raised an additional ground with regard to the amount suo moto disallowed by the assessee u/s 14A. The additional ground so raised was allowed by the Tribunal. The AO upon passing an order dated 16th May, 2016 to give effect to the order of the Tribunal, worked out the amount of refund due to be Rs. 54,52,12,250 which included interest of Rs. 21,25,91,553 which was granted from 1st April, 2007.

Subsequently, the AO passed an order u/s 154 withdrawing the interest granted u/s 244A to the extent attributable to the refund arising as a result of additional ground being raised by the assessee on the grounds that the delay in granting refund is due to assessee’s raising additional ground in respect of suo moto disallowance u/s 14A. He held that the case of the assessee is squarely covered by section 244A(2) of the Act.

Aggrieved, the assessee preferred an appeal to the CIT(A) who confirmed the action of the AO.

Aggrieved, the assessee preferr

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