ITAT Rules in Favour of M/s Small Industries Development over Interest on Refund
ITAT Rules in Favour of M/s Small Industries Development over Interest on Refund
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that M/s Small Industries Development (the assessee) is entitled to interest under Section 244A of the Income Tax Act from the date of refund to the date of actual receipt of the refund.
The Assessing Officer (AO) was unhappy with the order of the Commissioner of Income Tax (Appeals) (CIT-A) to grant interest to the assessee under Section 244A of the Income Tax Act for January to May 2019. The AO was also unhappy that the CIT-A had held that the assessee should be granted interest up to the date of receipt of the refund order, without considering that the Income Tax Act only provides for interest up to the date of grant of refund.
The two-member bench of Narender Kumar Choudhry (Judicial Member) and Prashant Maharishi (Accountant Member) of the ITAT relied on the case of Commissioner of Income Tax v. Pfizer Limited to rule that the assessee was entitled to interest on the refund amount until the actual receipt of the pay order by the assessee, following the order that sanctioned the refund.
The bench of the ITAT found no fault with the order of the CIT-A directing the AO to grant interest to the assessee under Section 244A of the Act up to the date of receipt of the refund order. As a result, the ITAT dismissed the grounds of appeal raised by the AO.
