Refund u/s Section 244A for delay in curing defects in TDS certificates-Commissioner of Income Tax is the final fact finding authority- High Court declines to interfere.
ABCAUS Case Law Citation:
ABCAUS 2248 (2018) (03) HC
The return of income of the Petitioner bank was processed u/s 143(1) and later on after scrutiny, assessment was completed under Section 143(3). However interest was not granted as envisaged u/s 244A on account of the delay in curing the defects in the TDS certificates.
The Petitioner filed an application before the Chief Commissioner to grant interest under Section 244A on the TDS amount refunded to them. The application was rejected by the Chief Commissioner on the ground that the delay was attributable to the assessee. The petitioner took up the matter before the Government of India, Ministry of Finance who informed the petitioner that they cannot directly interfere in the matter.
The petitioner filed a writ petition before the Hon’ble High Court. The Revenue contended that submitting TDS certificates without any defect is the obligation of the assessee. When substantial time was taken to cure the defects and resubmitting the same, the delay can only be attributed to the assessee.
The Hon’ble High Court opined that in view of section 201, there cannot be any dispute about the fact that the obligation to provide a certificate for deducting tax is on the deductor. Therefore the question was , if there is any defect in TDS certificate, and the petitioner fails to get it cured before filing of the return, petitioner can be termed as a person who had caused the delay?
The Hon’ble High Court expressed agreement with the Revenue that if the defect is noticeable on receipt of the certificate, it is for the deductee who makes a claim on the basis of the certificate to get the defects cured.
The Court noted that in the instant case, substantial time had elapsed for curing the defects, which according to the Department, was attributable to the assessee. Also Section 244A(2) clearly specifies that interest need not be paid if the proceedings of refund is delayed for reasons attributable to the assessee, in that event, the Revenue having refused interest on the basis of factual finding relying upon the statutory provision, the Court would not be be justified in interfering with the order. Accordingly the writ had been dismissed.
However, the instant Revision Petition was filed before the Hon’ble High Court in which the petitioner relied upon an earlier judgment of a Division Bench of the Court with reference to the very same subject matter and contended that it could not be placed when the matter was heard.
In the said case, it was the Revenue who had challenged the order passed by the lower authorities, directing payment of interest under section 244A of Income-tax Act, 1961 for the delay caused by the assessee for correcting the TDS certificates. The Division Bench had noted that authorities below had opined that the interest cannot be denied for the time taken by the appellant assessee to cure the defects in the TDS certificates as no amount is due from the assessee so far as TDS certificates and the amount was lying with the revenue. The Division Bench had declined to interfere with the order.
The Petitioner contended that when an identical case had been decided by the Division Bench, the petitioner was also entitled to have the same benefit to be adopted in the present case also.
The Revenue contended that the Hon’ble High Court had decided the case in the first round after evaluating the scope of Section 244A (2), which clearly indicates that if the proceedings resulting in the refund of delay for the reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable shall be excluded from the period for which interest is payable. Statue also indicates that, if any question arises as to the period to be excluded, it has to be decided by the Principal Chief Commissioner or the Chief Commissioner. Under what all circumstances can such an eventuality arise is a matter to be considered by a competent authority. Once the competent authority had taken such a decision, this Court, in a petition under Article 226 of the Constitution of India will not go into the merits of the contention, unless the decision is illegal or perverse.
The Hon’ble High Court opined that the Division Bench had considered a case in which interest was directed to be paid by the Commissioner of Income Tax, which was confirmed by the Tribunal. The said case rested on its own facts. Whereas, in the instant case, the Commissioner of Income Tax had denied the grant of interest on specific grounds and it was after arriving at a conclusion that such a power is vested with the Commissioner, that the Court had upheld the view expressed by the Commissioner.
Accordingly, this review petition was dismissed.