Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(ITAT) 21544

INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
BRR Kumar, Vice-President, Siddhartha Nautiyal, Judicial Member
Suzlon Gujarat Wind Park Ltd. – Appellant
Versus
Deputy Commissioner of Income Tax – Respondent
I.T.A. No.382/Ahd/2025

Advocates:
For the Appellants/Petitioners: Tushar Hemani
For the Respondents: B. P. Srivastav

Interest under Section 244A of the Income Tax Act for claims made in a timely original return is payable from the first day of the assessment year, even if a revised return is later filed, and the date of refund grant is the date of issuance of the refund instrument.

Headnote:(A) Income Tax Act, 1961 - Section 244A - Interest on refunds - Computation of interest - Assessee filed original return within due date under Section 139(1) - Subsequent revised return under Section 139(5) filed to rectify errors - Held, filing of revised return does not deprive assessee of interest from the first day of the assessment year for amounts claimed in the original return under Section 244A(1)(a)(i) - Interest under Section 244A(1)(a)(ii) is applicable only to additional claims made in revised return - Para 11.

(B) Interest on refunds - Date of grant of refund - Interest calculated until date of issue of demand draft - Department not expected to compute interest until date of encashment or bank credit - No unreasonable delay found in dispatching refund - Para 12.

Facts of the case:
The assessee claimed a refund of tax deducted at source. The Assessing Officer computed interest from the date of filing the revised return, attributing delay to the assessee. The appellate authority upheld this, treating the refund grant date as the issuance date of the demand draft.

Findings of Court:
The Tribunal directed recomputation of interest, holding that amounts claimed in the original return are eligible for interest from 1st April of the assessment year, while the revised return claims are subject to interest from the date of filing the revised return.

Issues: Whether interest under Section 244A for amounts claimed in the original return can be restricted due to a subsequent revised return, and whether the date of grant of refund is the date of issuance of the demand draft.

Ratio Decidendi: Filing a revised return to correct omissions does not negate the status of an original return filed in time; thus, interest under Section 244A(1)(a)(i) applies to original claims. The date of issue of the demand draft constitutes the 'date of grant' of refund as the Department cannot be held liable for delays beyond issuance.

Result: Appeal partly allowed.

Table of Content
1. summary of proceedings and the core issue regarding short grant of interest on tax refunds. (Para 1 , 2 , 3)
2. arguments concerning the period of entitlement for interest under section 244a for revised returns. (Para 4 , 5)
3. statutory interpretation of section 244a regarding interest commencement for original vs. revised returns. (Para 7 , 8 , 9 , 10 , 11)
4. determination of the 'date of grant' of refund as the date of instrument issuance. (Para 12 , 13)

O R D E R

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), ADDL/JCIT(A)-2, Kolkata vide order dated 24.01.2025 passed for A.Y. 2017-18.

2. The assessee has raised the following grounds of appeal:

“1. The Ld. CIT(A) has erred in law and on facts of the case in confirming the rejection of rectification application u/s. 154 of the Act for short grant of interest on refund u/s. 244A of the Act.

2. The Ld. CIT(A) has erred in law and on facts of the case in holding that the appellant is not eligible to receive Rs. 16,39,177/- on account of short grant of interest u/s. 244A of the Act on refund of Rs. 10,92,78,473/-.

3. Alternatively, and without prejudice the interest u/s. 244A of the Act on refund of Rs. 10,92,78,473/- shall be allowed till the date of preparation of demand draft order as directed by CIT(A) i.e. till September, 2018.

4. The Ld. CIT(A) has erred in law and on facts of the case in holding that the appellant is not eligible to receive Rs. 9,460/- on account of short grant of interest u/s. 244A of the Act on refund of Rs. 1,11,297/-.

5. Alternatively, and without prejudice, the interest u/s. 244A of the Act on refund of Rs. 1,11,297/- shall be allowed till the date of preparation of demand draft order as directed by CIT(A) i.e. till November, 2020.

6. The Ld. CIT(A) has erred in law and on facts of the case in not following the order for preceding year passed by his predecessor allowing short grant of interest on refund u/s. 244A of the Act on identical facts.

7. The Ld. CIT(A) has erred in law and on facts of the case in holding that the appellant was granted excess interest on refund on erroneous interpretation that the appellant’s case falls under sub-clause (ii) instead of sub-clause (i) of Section 244A (1)(a) of the Act.

8. The direction issued by Ld. CIT(A) to Ld. AO for verification of excess refund is bad in law as such direction is provided without issuing any show cause notice to the appellant u/s. 251(2) of the Act for proposed reduction in refund.

9. Both the lower authorities have erred in interpreting the provisions of S. 244A of the Act in its correct perspective.

10. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed.

11. The Appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of appeal.”

3. The brief facts of the case are that the assessee, Suzlon Gujarat Wind Park Limited (PAN: AAICS2717D), filed its original return of income for Assessment Year 2017-18 on 13.10.2017 under section 139(1) of the Income Tax Act, 1961 (the “Act”), claiming refund of ₹10,92,78,473/- on account of TDS/TCS. Subsequently, the assessee filed a revised return on 25.05.2018 under section 139(5), in which it made an additional claim of TDS of ₹1,47,030/-. Out of this, TDS credit of ₹1,11,297/- was allowed by the Department, and refund was accordingly issued vide rectification order under section 154 dated 22.07.2020. The refund and interest granted under s

Click Here to Read the rest of this document

2025 Supreme(Online)(ITAT) 21544

INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)BRR Kumar, Vice-President, Siddhartha Nautiyal, Judicial MemberSuzlon Gujarat Wind Park Ltd. – AppellantVersusDeputy Commissioner of Income Tax – RespondentI.T.A. No.382/Ahd/2025

Interest under Section 244A of the Income Tax Act for claims made in a timely original return is payable from the first day of the assessment year, even if a revised return is later filed, and the date of refund grant is the date of issuance of the refund instrument.

INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
BRR Kumar, Vice-President, Siddhartha Nautiyal, Judicial Member
Suzlon Gujarat Wind Park Ltd. – Appellant
Versus
Deputy Commissioner of Income Tax – Respondent
I.T.A. No.382/Ahd/2025