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October 2022

Interest granted u/s 244A(2) cannot be withdrawn by passing a rectification order u/s 154 when PCCIT / CCIT / PCIT / CIT has not decided exclusion of period for interest.

By Jagdish Punjabi, Chartered Accountant
Devendra Jain, Advocate
Reading Time 3 mins
30 Otis Elevator Company (India) Ltd. vs. DCIT
[2022] 141 taxmann.com 391 (Mum. - Trib.)
A.Y.: 2010-11
Date of order: 18th August, 2022
Section: 244A(2)

Interest granted u/s 244A(2) cannot be withdrawn by passing a rectification order u/s 154 when PCCIT / CCIT / PCIT / CIT has not decided exclusion of period for interest.

FACTS

The assessment was finalized u/s 143(3) on 4th February, 2014. Subsequently, however, the Assessing Officer (AO) withdrew the interest granted u/s 244A(2) on the ground that “it is undisputed fact that in the income tax return filed u/s 139(1) on 30th September, 2010, the TDS claim was Rs. 10,62,11,325 which was enhanced to Rs. 13,70,80,237 by filing revised return on 29th March, 2012” and “thus, the delay was on the part of the Assessee to make correct claim of refund”. The interest payment of Rs. 43,71,038 was thus withdrawn, disregarding the plea of the Assessee that on merits such a claim could not have been declined, and, in any event, such a withdrawal of interest is beyond what is permissible u/s 154. The assessee carried the matter in appeal but without any success. The assessee is in second appeal before us.

HELD

The Tribunal observed that the dispute between the Assessee and the revenue was whether or not the Assessee is responsible for delay in refund. It noted that the guidance t
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