In Wipro Limited vs. The Joint Commissioner of Income Tax and the Deputy Commissioner of Income Tax [WRIT PETITION NO.20040/2019 (T-IT)] the Karnataka High Court allowed the additional 3% interest on the delayed Income Tax Refund to Wipro (“the Petitioner”) from the Deputy Commissioner of Income Tax (DCIT) (“the Respondent”).
The Petitioner approached the Writ Court to challenge the order in which the Respondent, DCIT, denied additional 3 percent interest on the allegedly delayed refund of amount related to Assessment Year 2008-09 and the Respondent denied its application filed under section 244A(1A) (“the Income Tax Act”).
The Petitioner argued that under section 115JB of the Income Tax Act, the assesse’s right to interest under section 244A(1A) is designed to restore parity to the situation where the Revenue imposes interest on late tax payments under section 234B.
The Revenue argued that Section 240 contemplates refund only after completion of the exercise mandated by the appellate order; where the assessment is set aside and a fresh assessment is ordered, the question of granting interest at once would not arise until after the amount to be refunded is determined, which occurs after the fresh assessment or reassessment is completed in term.
The Hon’ble Justice Krishna S. Dixit’s single judge bench allowed the Assesse to file a new claim for extra interest at the rate of 3% per year for the period covered by section 153(5) r/w section 244A(1A) of the Income Tax Act within eight weeks. The Respondents are served with a Writ of Mandamus directing them to compute the interest due to date and pay it to the Assesse within eight weeks.
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