Court No. 37
Civil Misc. Writ Petition (Tax) No. 307 of 2009
Hamirpur District Co-operative Bank Ltd. ... Petitioners
Versus
Income Tax Officer, Ward-6(3), Mahoba and others ... Respondents
Hon’ble Yatindra Singh, J
Hon’ble Rajes Kumar, J
THE FACTS
1.The petitioner is a District Cooperative Bank. It was assessed on income
Rs.2,73,56,000.00 with the tax liability Rs.1,11,83,799.00 for the assessment year
2004-05 under the Income Tax Act (the Act). The petitioner filed an appeal against
the assessment order. During pendency of the petitioner’s appeal, Rs. 50 lacs
were recovered towards the payment of tax liability on 28.3.2007 by attaching the
accounts of the petitioner in different banks.
2. The appeal of the petitioner was ultimately allowed on 5.3.2008. The
Department filed second appeal before the Income Tax Appellate Tribunal,
Allahabad (the Tribunal). The Tribunal dismissed the appeal on 23.7.2008. In view
of the appellate orders, the amount ought to have been returned to the petitioner.
However, this was not done.
3. The petitioner was assessed for the assessment year 2006-07 on the income of
Rs.1,25,23,000.00 with tax liability of Rs.38,28,980.00. Consequently the
assessing authority raised a demand of Rs.50,54,328.00 on 20.11.2008 after
including the interest on the tax.
4. Later, out of the amount recovered from the petitioner, Rs.2,45,772.00 was
returned through the refund order dated 18.12.2008. This was done after adjusting
the tax amount for the assessment year 2006-07. Hence the present writ petition.
POINTS FOR DETERMINATION
5. We have heard Sri Rakesh Ranjan Agrawal, counsel for the Appellant and Sri
Ashok Kumar, counsel for respondent. The following points arise for determination:
(i) Whether the amount ought to have been returned without adjusting the tax
for the subsequent year.
(ii) Whether the Department is liable to refund any further amount to the
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petitioner.
1st POINT
6. The appeal filed by the petitioner before the Commissioner, Income Tax was
allowed. The appeal of the Department before the Tribunal was also dismissed.
The amount ought to have been returned.
7. The demand notice for the assessment year 2006-07 is dated 20.11.2008. In the
notice itself it is mentioned that the petitioner could deposit the amount within sixty
days from the receipt of the notice.
8. The adjustment has been made by the Department within sixty days. This was
not proper. However, it is not necessary to probe further as sixty days have
passed. The only question remains at this stage is whether the petitioner is entitled
for refund of any further amount.
2nd POINT
9. The petitioner has been given interest on the amount recovered from him up to
31.3.2008. This is clear from the demand notice/refund order dated 31.3.2008.
The petitioner has been given a refund order of Rs.2,45,772.00 on 18.12.2008.
This is the day when the Department returned the amount. Interest under section
244-A of the Act ought to have been given up to this date and not only up to
31.3..2008. In view of this, the petitioner is entitled to further interest on the
principal amount from 1.4.2008 up to 18.12.2008 in accordance with section 244-A
of the Act.
10. The aforesaid interest has been wrongly kept by the Department from
18.12.2008. They are also liable to pay interest on the same. Considering the
circumstances of the case, the Department will also pay simple interest at the rate
of 10% per annum on this amount from 19.12.2008 up to the date of actual
payment.
CONCLUSIONS
11. Our conclusions are as follows:
(i) The petitioner is entitled to interest from 1.4.2008 up to 18.12.2008 in
accordance with section 244-A of the Income Tax Act;
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(ii) On the aforesaid interest, the petitioner is also liable simple interest of 10%
from 19.12.2008 up to the date of actual payment.
12. With the aforesaid observations, the writ petition is allowed with costs.
Date: 12.8.2010
BBL