The statutory obligation to pay interest on tax refunds under the Income-tax Act strengthens entitlement for interest on delayed payments, classifying undue retention of funds due and payable.

judgment :

1. Rule. Respondents waive service. With the consent of the parties, Rule made returnable forthwith and heard finally.

2. In the present Petition, the Petitioner is seeking the following reliefs:

a. payment of interest under Section 244A(1A) of the Income-tax Act, 1961 (for short ‘I. T. Act’) of Rs. 5,46,32,205/- for AY 2007- 08, Rs.1,46,19,187/- for AY 2013-14 and Rs. 66,25,956/- for AY 2014-15 totalling to 7,58,77,348/- as determined in the order giving effect for the respective years;

b. Grant of interest under Section 244A(1A) of the I. T. Act to the tune of Rs. 78,04,600/- for AY 2007-08, Rs. 52,47,913/- for AY 2013-14 and Rs. 52,55,069/- for AY 2014-15 totalling to Rs. 1,83,07,582/- for all three years being interest upto the date of payment of refund;

c. Grant of interest under Section 244A(1) of the I. T. Act to the tune of Rs. 1,04,06,134/- for AY 2007-08, Rs. 1,08,14,525/- for AY 2013-14 and Rs. 50,26,434/- for AY 2014-15 totalling to Rs. 2,62,47,093/- for all three years being interest upto the date of payment of refund; and

d. Interest or Compensation on delayed payment of interest of Rs. 7,58,77,348/- as computed in sub-paragraph(a) above.

3. The above reliefs are sought by the Petitioner as successor in interest of Aricent Technologies (Holding Limited), which company got amalgamated in the Petitioner vide order of the National Company Law Tribunal dated 23.12.2022 who in turn was the successor in interest of M/s. Flextronics Software Systems Ltd which got merged with Aricent Technologies (Holding Limited) vide order of the Delhi High Court dated 16.05.2007. It is not disputed that the jurisdiction over the PAN of the Petitioner and of Aricent Technologies (Holding Limited) is with Respondent No. 2.

4. The learned Counsel for the Petitioner submitted that insofar as payment of interest under Section 244A(1A) is concerned, it is not disputed that such interest was determined to be payable by the order giving effect for the respective years. For AY 2007-08, the order dated 23^rd August 2023 giving effect to the order of the Delhi High Court is at Exhibit-C to the Petition. Similarly, for AY 2013-14, the order dated 23^rd August 2023 giving effect to the order of the ITAT is at Exhibit D to the Petition, and for AY 2014- 15, the order dated 23^rd August 2023 giving effect to the order of the ITAT is at Exhibit-E to the Petition. He submitted that such orders had determined amount of tax refundable, along with interest under Section 244A(1) of the I. T. Act and interest under Section 244A(1A) of the I. T. Act, payable to the Petitioner. Though, the amount of refund and interest under Section 244A(1) of the I. T. Act was paid, the interest under Section 244A(1A) of the I. T. Act was not paid to the Petitioner. Several requests have been made to release such interest, but till date such interest has not been paid to the Petitioner.

5. The learned counsel submitted that the relief in paragraph 2(b) and 2(c) as brought out earlier, is for interest under Section 244A(1) and 244A(1A). Such interest was calculated in the respective orders giving effect, all dated 23.08.2023, till the date of the respective orders. However, refunds for AY 2007-08 was granted to the Petitioner on 13.05.2024 and that for AY 2013-14 and AY 2014-15, were granted on 09.07.2024. It is therefore, claimed by the Petitioner that refund under Section 244A(1) and 244A(1A) of the I. T. Act have to be granted to the Petitioner upto the date of payment of refund in terms of the relevant provisions of the I. T. Act. The same has been calculated by