The Gauhati High Court has held that interest on refund under Section 244A of the Income Tax Act, 1961 applies only to those cases where refund is delayed by the Income Tax Department and declined interest to construction contractor whose TDS was deposited in the wrong PAN number by the Defence Ministry’s Border Roads Organisation, the Employer. Surya Construction, the petitioner had received contractual amounts from BRO after deduction of tax. Later when notices were issued to the Petitioner by the Income Tax Department, it came to light that there was no deposit being made by BRO since the PAN number of the petitioner was wrongly written. The petitioner preferred writ petition seeking corrective steps under Section 194C (for depositing the amount). It also sought interest in terms with Section 244A from BRO. Get a Copy of Computation of Income From Salary, Click here

The respondent revenue claimed that after discovering the error, the amount was duly deposited in favour of Petitioner’s PAN number. Thus, the first prayer in the petition stood satisfied. The High Court noted that there are no other materials placed before the Court to show that had these amounts which were required to be deposited by the respondent No. 2 [BRO], if were deposited, the petitioner would have been entitled to the refunds. In absence of such materials, the question of granting interest as claimed do not arise. A single bench of Justice Devashis Baruah viewed that even if the amount was deposited in the correct PAN number,

Petitioner was not entitled to any refunds, rendering the provision inapplicable to the case. Get a Copy of Computation of Income From Salary, Click here The court further observed that Section 244 A of the Act of 1961 cannot be made applicable to the present facts as the said provision appears to duly apply in respect to cases where the Department had delayed the payment of refunds. Advocate TR Sarma  appeared for Petitioner.  Goswami  appeared for Respondent