Deductor entitled to avail of interest on TDS refunded to it when payee itself paid advance tax on its income

Section 244A, read with section 194A, of the Income-tax Act, 1961 - Refunds - Interest on [Deemed assessee] - Petitioner had transactions with ITC in course of which petitioner was liable to pay interest to ITC - In view of provisions of section 194A, petitioner effected TDS from interest and remitted same to revenue - Subsequently, petitioner requested department to refund said TDS amount because ITC had itself paid tax liability in respect of amount remitted by petitioner - Department refunded TDS amount without paying any interest on ground that liability to pay interest on refund arises only in respect of an assessee, and in instant case, petitioner could not be regarded as an assessee - Whether on facts, petitioner was a deemed-assessee in respect of transactions as far as TDS was concerned - Held, yes - Whether, therefore, department was liable to pay interest on refund of TDS to petitioner from date of assessment of returns of ITC in respect of TDS in question till date of refund - Held, yes [Para 5] [In favour of assessee]

Refer: [2014] 42 taxmann.com 184 (Gauhati)

HIGH COURT OF GAUHATI

Raj & Company

v.

Union of India