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October 2010

Refund — Interest on amount to be refunded would partake the character of ‘amount due’ u/s.244A.

By Kishor Karia | Chartered Accountant
Atul Jasani | Advocate
Reading Time 1 mins

New Page 1

1 Refund — Interest on
amount to be refunded would partake the character of ‘amount due’ u/s.244A.


[CIT v. H.E.G. Ltd.,
(2010) 324 ITR 331 (SC)]

For A.Y. 1993-94, the amount
paid by the assessee towards TDS was
`45,73,528. The tax
paid after original assessment was `1,71,00,320. The total of TDS amounting to
`45,73,528 plus tax paid after original assessment of `1,71,00,320 stood at
`2,16,73,848. In other words, the total tax paid had two components, viz. TDS +
tax paid after original assessment. The assessee was entitled to the refund of
`2,16,73,848 (consisting of `1,71,00,320 and `45,73, 528 which payment was made
after 57 months and which is the only item in dispute). The assessee claimed
statutory interest for delayed refund of `45,73,528 for 57 months between April
1, 1993 and December 31, 1997 in terms of S. 244A of the Income-tax Act. The
Supreme Court held that the assessee was entitled to interest for 57 months on
`45,73,528. The principal amount of `45,73,528 has been paid on December 31,
1997, but net of interest which, as stated above, partook of the character of
‘amount due’ u/s.244A. The Supreme Court further held that the interest
component would partake of the character of the ‘amount due’ u/s. 244A.

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