Dariyave Singh Karnawat v. Chief Commissioner Of Income Tax, Udaipur & Ors

1/5 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR O R D E R S. B. Civil Writ Petition No.3782/2008 Dariyave Singh Karnawat Vs. Chief Commissioner of Income Tax, Udaipur & Ors. DATE OF ORDER th:::14 November 2011 P R E S E N T HON'BLE DR. JUSTICE VINEET KOTHARI Mr. Deelip Kawadia, for the petitioner.Mr. K.K. Bissa, for the respondents. --- 1.The petitioner, an income tax assessee, has prayed inthis writ petition that excess TDS (Tax Deducted at Source) by LIC onmaturity of policies paid to him, in his case amounting to Rs.19,083/-for the assessment year 1994-95 was initially not refunded as perreturn of income filed by him as there was delay of four days only infiling such return income, which was due to be filed on or before31.03.1996, under Section 139 (4) of the Act, but the same was filedon 04.04.1996. 2.Learned Chief Commissioner of the Income Tax,Udaipur, vide order Annex-4 dated 14.11.2005 condoning the saiddelay of four days, in his power delegated upon it under Section 119(2) (b) of the Act, condoned the said delay, and directed theAssessing Authority to admit the claim of refund of Rs.19,083/- after S.B.C.W.P. No.3782/2008Dariyave Singh Karnawat Vs. Chief Commissioner of Income Tax, Udaipur & Ors.Order dt: 14/11/2011 2/5 due verification of TDS certificates and evidence of other taxpayments, if any. However, the said authority, Chief Commissioner ofIncome Tax, added the impugned part in the said order that “nointerest will be paid on the belated refund”. 3.Being aggrieved by the said impugned part, thepetitioner-assessee tried his luck by filing representation before theCentral Board of Direct Taxes, New Delhi also vide Annex-5 dated29.07.2006, however, the said request was turned-down vide Annex-8 dated 25.10.2006. The petitioner-assessee thereafter approachedthis Court by filing present writ petition on 24.07.2007. 4.Learned counsel for the petitioner, Mr. Deelip Kawadia,submitted that the petitioner-assessee was not at fault at all and theminor delay in filing return of income itself was condoned by the ChiefCommissioner of Income Tax, Udaipur and once such return ofincome was treated as regularly filed with such condonation of delay,there was no justifiable reason to deny interest on such refund ofexcess TDS in his case. He drew the attention of the Court towardsSections 244 and 244A of the Act, which are reproduced hereinbelow for ready reference. “244-Interest on refund where no claim is needed. (1) Where a refund is due to the assessee in pursuanceof an order referred to in Section 240 and the AssessingOfficer does not grant the refund within a period of threemonths from the end of the month in which such order ispassed, the Central Government shall pay to the assesseesimple interest at fifteen per cent per annum on the amount of refund due from the date immediately following the expiryof the period of three months aforesaid to the date on whichthe refund is granted. 244A-Interest on refunds. (1) Where refund of any amount becomes due to theassessee under this Act, he shall, subject to the provisions ofthis section, be entitled to receive, in addition to the saidamount, simple interest thereon calculated in the followingmanner, namely: - (a) where the refund is out of any tax paid underSection 115WJ or collected at source under section 206C orpaid by way of advance tax or treated as paid under Section199, during the financial year immediately preceding theassessment year, such interest shall be calculated at the rateof on half per cent for every month or part of a monthcomprised in the period from the 1[st] day of April of theassessment year to the date on which the refund is granted.” 244A-Interest on refunds. (1) Where refund of any amount becomes due to theassessee under this Act, he shall, subject to the provisions ofthis section, be entitled to receive, in addition to the saidamount, simple interest thereon calculated in the followingmanner, namely: - (a) where the refund is out of any tax paid underSection 115WJ or collected at source under section 206C orpaid by way of advance tax or treated as paid under Section199, during the financial year immediately preceding theassessment year, such interest shall be calculated at the rateof on half per cent for every month or part of a monthcomprised in the period from the 1[st] day of April of theassessment year to the date on which the refund is granted.” 5.On the other hand, learned counsel for the Revenue, Mr.K.K. Bissa relying upon a decision of Kerala High Court in the case ofM. Ahammadkutty Haji Vs. Chief Commissioner of Income-Tax &Ors. reported in 288 ITR 304 submitted that on the belated refunds,no such interest could be granted to the assessee. 6.Having heard learned counsels for the parties, this Courtis of the opinion that present writ petition deserves to be acceptedand allowed. The refund in question was granted to the assessee on06.12.2005 for the Assessment Year 1994-95, after about 10 years offiling of his returns. The return of income with such claim of refundwas filed by the assessee on 04.04.1996. The delay of four days was Order dt: 14/11/2011 4/5 condoned by the learned Chief Commissioner of Income Tax himselfin exercise of his powers under Section 119 (2) of the Act. The refundprovisions contained in Section 244 stipulate interest on refund whereno claim is needed @ 15% p.a. on the amount of refund due from thedate immediately following the expiry of period of three months to thedate on which refund is granted; whereas Section 244A envisagesthat where the refund is out of any tax collect at source under Section206C of the Act, the interest shall be calculated @ ½ % every month,viz. 6% p.a. The tax deducted at source from the insurance maturityvalue of the assessee in the present case by the Life InsuranceCorporation of India was undoubtedly advance payment of tax on hisbehalf and refund claim made in the return filed by the assessee,require no further claim to be made by him; and, therefore, in theopinion of this Court, Section 244 of the Act would apply in thepresent case, which envisages processing of refund claims where nosuch claim is required to be made by the assessee. 7.The Revenue clearly admits its liability to make refund ofthe excess TDS in the present case and fact that said refund hasbeen granted to the assessee with a delay of about ten years, isattributable to the Revenue itself and not the petitioner-Assessee.Therefore, in the present case, the assessee would be entitled tointerest @ 15% per annum under Section 244 of the Act on the saidexcess TDS of Rs.19,083/-. 8.Accordingly, this writ petition is allowed and the DJ/- S.B.C.W.P. No.3782/2008Dariyave Singh Karnawat Vs. Chief Commissioner of Income Tax, Udaipur & Ors. Order dt: 14/11/2011 5/5 impugned part of the order Annex-4 dated 14.11.2005 passed by theChief Commissioner of Income Tax, Udaipur, which stipulates that nointerest will be paid on the belated refund, is quashed and theRevenue is directed to compute and make payment of such intereston the aforesaid refund (Rs.19,083/-) @ 15% per annum from01.01.1998 till the actual date of refund since the application seekingsuch refund was filed by the assessee on 06.10.1997 (Annex-1),which ought to have been decided within a reasonable period of threemonths. No costs. (DR. VINEET KOTHARI), J.