Saturday, 17 June 2017

HC : Sandvik ratio applicable only to CBDT's 'wanton' delay, not for delayed refund claim

Meghalaya HC allows Sec. 244A interest on TDS refund  to assessee-deductee (a co-operative bank) for AYs 2000-01 to 2003-04, but rejects ‘interest on interest’ claim; With respect to TDS on assessee’s interest income wrongly deducted by certain Central, State organisations (despite being exempt u/s. 80P), assessee made TDS refund claim with interest before CBDT u/s. 119(2)(b) which was rejected; HC allows assessee’s interest on refund claim u/s. 244A  relying on SC ruling in Tata Chemicals Ltd. and P&H HC ruling in National Horticulture Board, but holds that in view of Sec. 244A(2),  interest be allowed from the date of making petition to CBDT and not before; Referring to factual matrix, HC holds that “the delay in claiming refund, from the date it should have been claimed for the relevant AYs and until 26.02.2008 (i.e date of filing petition before CBDT) for each of the four AYs, is squarely attributable to the petitioners alone”;   HC further rejects assessee’s compensation claim in the form of 'interest on interest', distinguishes its reliance on SC ruling in Sandvik Asia Ltd., notes that assessee therein was made to wait for refund of interest for decades and was hence greatly prejudiced for inordinate delay on the part of the Revenue;  Notes that in present case, the initial long delay (prior to making application before CBDT) was attributable to the petitioners themselves, further observes that " the question is as to whether the present one had been a case of wanton or intentional inaction on the part of the respondents to the extent that further compensation in the form of interest over interest be allowed? In our view, the answer is in the negative.";  With respect to assessee’s TDS refund  claim, HC allows the same despite non-verification from concerned deductors relying on Allahabad HC ruling in Rakesh Kumar Gupta , takes note of the TDS certificates submitted by assessee.:HC 

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