Interest on refund


I have received refund of Income Tax with 6%. This was after 2 types of delays - Firstly, on account of administrative delays of almost 1 year in conducting the assessments and secondly, after successful assessments, again administrative delays of almost 1 year in refunding the tax. Am I entitled to compensation OR higher interest for these 2 years of delay. ALSO, am I entitled to a higher rate of interest beyond the 6% which they have given?
 
Reply   
 
Practicing Lawyer

Law does not provide for punitive interest for delays on the part of revenue. You have to be satisfied with the interest amount you received as per law. Bad news is that interest amount is again taxable in your hand and you have to discharge your tax liability on such interest in the year, in which it is received.

 
Reply   
 



Thank you Sir for your valuable reply. I have 2 more queries. 

1.  Are there any case laws, etc wherein individuals/corporates/etc would have successfully won cases against the department for compensation against delays. 

2.  Can I file a case against the IT deptt in the Consumer Court / Civil Court for compensation for delays?

Thanks.. Preeti Mohan

 
Reply   
 

Thank you Sir for your valuable reply. I have 2 more queries. 

1.  Are there any case laws, etc wherein individuals/corporates/etc would have successfully won cases against the department for compensation against delays. 

2.  Can I file a case against the IT deptt in the Consumer Court / Civil Court for compensation for delays?

Thanks.. Preeti Mohan

 
Reply   
 
Practicing Lawyer

1. There is no precedent available wherein the courts have directed the department to pay punitive interest.

2. You not being a consumer, Consumer Courts would not entertain you and the Act itself protects the departments against any action (except writs) to be entertained by civil courts.

 
Reply   
 

Thank You Sir. Preeti M
 
Reply   
 

Dear Mr Chugh... am sorry to go back to the same matter. Just one query - do you think I could win the matter if I go ahead with a writ in Delhi High Court on compensation for delays. I suppose a number of writs would already have gone to the High Courts in this regard - would they have succeeded?

Thanks & Regards... P Mohan

 
Reply   
 
Practicing Lawyer

Looking back to your querry I noticed

a) Your assessment was completed after a delay of one year 

In this regard please note the law provide for various time limits to finish/complete/finalise assessment beyond that it becomes time barred. In case your assessment is not invalid and time barred by limitation, the same has been completed within the permissible time available under the law and you are not entitled any interest beyond as prescribed under section 244A. The department must have paid you that. In case of any short fall or deficiency in that you may move application u/s 154 for rectification of interest calculation before jurisdictional assessing officer.

 

b) Your refund was further delayed by one year after assessment.

 

The department is bound to issue refund/demand notice alongwith assessment order and pay interest as prescribed under section 244A of the Income-tax Act.

The act itself is sovergn and enjoys immunity. There is no precedence in my knowledge where in a Writ the Court has directed the Department to pay punitive interest.

 

Thx

 

 
Reply   
 

Thank you Mr Chugh for your invaluable feedback.

Thanks... PMohan

 
Reply   
 

LEAVE A REPLY


    

Your are not logged in . Please login to post replies

Click here to Login / Register  



 

  Search Forum








×

Menu

Post a Suggestion for LCI Team
Post a Legal Query
Forensics & Evidence     |    x