ORDER :

Dinesh Maheshwari, J.

The petitioners, Meghalaya Cooperative Apex Bank Limited and its Managing Director, have preferred this writ petition on their grievance in relation to the claim for refund of the Tax Deducted at Source ['TDS'] for the Assessment Years 2000-2001, 2001-2002, 2002-2003 and 2003-2004, particularly where the Central Board of Direct Taxes ['CBDT'], though condoned the delay in filing the claim for refund under Section 119 (2) (b) of the Income Tax Act, 1961 ['the Act'] but, directed the Assessing Officer to allow the claim of refund while declining interest; and where in the assessment orders dated 30.12.2013, the Assessing Officer declined to allow the interest as also a portion of the refund claim on the ground of non-confirmation from the deductors.

2. The petitioners would assert that denial of interest and a part of refund claim is violative of their rights under Section 244-A of the Act and that they are entitled to be compensated by way of further interest over interest.

3. Shorn of unnecessary details, the relevant background aspects of the matter are as follows: The petitioner No.1 is said to be a Co-operative Bank engaged in the business of banking and claim to be exempted from the payment of income tax on the income derived from the interest on securities as per the provisions contained in Section 80 P (2)(a)(i) of the Act. During the financial years 1999-2000 to 2002-2003, corresponding to the Assessment Years 2000-2001 to 2003-2004 respectively, the petitioner bank made huge investments in the Central, State and Trustee Securities and earned income through interest over such deposits. The case of the petitioners had been that the concerned organizations with whom the investments were made for the said Assessment Years, deducted TDS on the interest income under Section 193 of the Act to the tune of Rs. 2,24,07,941/- and deposited this deducted amount with the respondents, though the petitioners were not liable for any such tax over the income derived from the interest on securities.

4. Admittedly, a claim for refund of TDS (after adjustment of tax liability) to the tune of Rs. 2,22,78,250/- was made on behalf of the petitioner-bank only on 05.10.2006 by filing its returns for the aforesaid Assessment Years while quoting PA Number as: AADCM3043M. It is the case of the petitioners that while submitting the returns for subsequent Assessment Years, it was noticed that PA Number earlier obtained was not correct as per the status of the petitioner as a Co-operative Bank and hence, a new PA Number AAAAM8227G was obtained in order to correct the status of petitioner; and revised returns for the Assessment Years 2000-2001, 2001-2002, 2002-2003 and 2003-2004 were filed on 08.03.2007. Further case of the petitioners is that after repeated requests for processing the claim of refund, the respondent No.2-Assistant Commissioner of Income Tax, Circle-Shillong informed, by his letter dated 11.09.2007, that the belated refund claim exceeded a sum of Rs. 1 lakh and by virtue of CBDT's Circular No.670 dated 26.10.1993, such a claim was not admissible in his office. The petitioners have further pointed out that they made a request before the respondent No.3-Chief Commissioner of Income Tax, Shillong, but looking to the quantum of the amount involved, the prayer had to be made to the CBDT and accordingly, they filed a petition under Section 119(2)(b) of the Act on 26.02.2008 before the CBDT for admitting the claim for refund of excess tax paid by way of TDS along with interest.

5. On the petition so filed on 26.02.2008, the CBDT, in its order dated 19.10.2011, found it to be a case of genuine hardship and on the facts and in the circumstances of the case, while condoning the delay in filing the returns to claim refund for the aforesaid Assessment Years, directed the Assessing Officer to allow the refund claims su