INCOME TAX ACT, 1961

Section 244A

Refund - Interest under section 244A - Eligibility of -

Assessee was allotted shares by his employer and tax was demanded from assessee's employer on the ground that employer failed to make Tax Deductions at Source (TDS). Tribunal answered the issue in favour of assessee's employer holding that he was not required to make Tax Deduction at Source on the shares allotted to its employees. Further, on appeal, High Court confirmed the aforesaid order of Tribunal. Assessee therefore filed the revised return for assessment year 1999-2000 and pleaded for refund of the amounts paid as tax together Held: Supreme Court in case of Sandvik Asia Ltd. v. CIT (2006) 280 ITR 0643 (SC) : 2006 TaxPub(DT) 1272 (SC) had ordered payment of interest in case of delayed payment of refund. There it was held amounts paid during pendency of the appeal were to be considered as deposits and therefore, they should be refunded back together with interest. Sub-clause (1) (a) to section 244A permits interest on delayed payment of refund. That being the case, assessee was justified in asking for interest on delayed refund of tax that was paid by his employer which was held to be not payable by employer. There was no basis for denying interest on such delayed refund of the amounts.

REFERRED : Sandvik Asia Ltd. v. CIT & Ors. (2006) 280 ITR 0643 (SC) : 2006 TaxPub(DT) 1272 (SC) Ramaa Sivaram v. Chief CIT & Anr. (2010) 322 ITR 0586 (Mad) : 2010 TaxPub(DT) 1655 (Mad-HC) Infosys Technologies Ltd. v. Dy. CIT (2003) 086 ITD 0312 (Bang) : 2003 TaxPub(DT) 0294 (Bang-Trib)

FAVOUR : In assessee's favour

A.Y. :

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