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March 2012

Interest on refund: Section 244A of Incometax Act, 1961: A.Y. 1998-99: Period for interest: Period of delay caused by assessee: Assessee’s belated claim for deduction allowed by CIT(A): No delay caused by assessee: Interest payable from beginning of relevant A.Y.

By K. B. Bhujle, Advocate
Reading Time 1 mins
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[CIT v. South Indian Bank Ltd., 340 ITR 574 (Ker.)]

For the A.Y. 1998-99, the assessee’s belated claim for bad debts was rejected by the Assessing Officer for failure to establish the claim. The claim was allowed by the CIT(A). The Assessing Officer denied interest on refund u/s.244A of the Income-tax Act, 1961 on the ground that the delay was attributable to an additional claim of deduction which was allowed by the CIT(A). The Tribunal held that the assessee was entitled to interest from 1-4-1999.

On appeal by the Revenue, the Kerala High Court upheld the decision of the Tribunal and held as under:

“The Assessing Officer had not established that the assessee had caused any delay in issuing the refund order. There was no decision by the Commissioner or Chief Commissioner on this issue. The assessee was eligible to get interest from 1-4-1999, till the date of refund.”

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