Law:

Section:

Section 244A of the Income-tax Act, 1961 - Refunds - Interest on - Whether expression 'proceeding' as appearing in sub-section (2) of section 244A includes within its ambit an appeal proceeding consequent to which refund may have become due - Held, yes - For assessment year 1991-92 assessee filed its return of income on 31-12-1992 showing transport subsidy received by it as taxable income - Thereafter, return was processed and assessment was completed on 16-5-1994 - At no stage of assessment proceeding any objection was raised by assessee to effect that transport subsidy received by it was not taxable - However, against assessment order dated 16-5-1994 assessee filed an appeal whereby Commissioner (Appeals) directed Assessing Officer to delete transports subsidy from total income of assessee - Pursuant to said order Assessing Officer deleted transport subsidy amounting to Rs. 98,79,266 from total income of assessee and, furthermore, allowed interest under section 244A on amount of refund that was found due to assessee for a period of 33 months, i.e., from 1-4-1992 to 6-12-1994 - Subsequently, Assessing Officer started rectification proceeding - Thereafter, by order dated 31-3-2000, Assessing Officer took view that as assessee had raised the question of taxability of amount of transport subsidy only at appellate stage, grant of refund was delayed for reasons attributable to assessee - Consequently, interest on refunded amount was held to be payable for a period of eight months i.e., from 16-5-1994 (date of completion of assessment) up to 13-12-1994, i.e., date of order of Assessing Officer following order dated 27-10-1994 passed by Commissioner (Appeals) - Whether since assessee was responsible for delay in grant of refund, Assessing Officer rightly held that assessee would be entitled to interest on refunded amount with effect from 16-5-1994 till date of payment of refundable amount - Held, yes FACTS For the assessment year 1991-92, the assessee filed its return of income on 31-12-1992, showing transport subsidy received by it as taxable income. However, in the note below the computation of income it was mentioned by the assessee that transport subsidy was not…

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