IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3826 OF 2012 M/S. UNIVERSAL CABLES LTD. APPELLANT(S) VERSUS COMMISSIONER OF INCOME-TAX, JABALPUR RESPONDENT(S) O R D E R Heard learned counsel for parties. limited issue that needs to be considered in present appeal is whether appellant would be entitled to interest on amount refunded by Department. appellant relies on decision of this Court in Union of India Vs. Tata Chemicals Ltd. reported in (2014) 6 SCC 335, in particular, paragraph 37 of said decision. same reads thus: - 37. tax refund is refund of taxes when tax liability is less than tax paid. As per old section assessee was entitled for payment of interest on amount of taxes refunded pursuant to order passed under Act, including order passed in appeal. In present fact scenario, deductor/assessee had paid taxes pursuant to special order passed by assessing officer/Income Tax Officer. In appeal filed against said order assessee has succeeded and direction is issued by appellate authority to refund tax paid. amount paid by resident/deductor was retained by Government till direction was Signature Not Verified issued by appellate authority to refund Digitally signed by RAJNI MUKHI same. When said amount is refunded it should Date: 2019.12.17 17:14:15 IST Reason: carry interest in matter of course. As held by Courts while awarding interest, it is kind of compensation of use and retention of money collected unauthorizedly by Department. When collection is illegal, there is corresponding - 2 - obligation on Revenue to refund such amount with interest inasmuch as they have retained and enjoyed money deposited. Even Department has understood object behind insertion of Section 244-A, as that, assessee is entitled to payment of interest for money remaining with Government which would be refunded. There is no reason to restrict same to assessee only without extending similar benefit to resident/deductor who has deducted tax at source and deposited same before remitting amount payable to non-resident/foreign company. (emphasis supplied in italics) From dictum in this judgment, it is clear that there is no reason to deny payment of interest to deductor who had deducted tax at source and deposited same with Treasury. In our opinion, this observation squarely applies to appellant. As result, we allow this appeal and direct Department to pay interest as prescribed under Section 244-A of Income Tax Act as applicable at relevant time at earliest. appeal is allowed in aforesaid terms. No costs. All pending applications are disposed of. J. [A.M.KHANWILKAR] J. [DINESH MAHESHWARI] NEW DELHI; DECEMBER 12, 2019. ITEM NO.105 COURT NO.7 SECTION IV-A SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Civil Appeal No(s). 3826/2012 M/S UNIVERSAL CABLES LTD. Appellant(s) VERSUS C.I.T-II,JABALPUR Respondent(s) ([ AT TOP ] ) Date : 12-12-2019 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.M. KHANWILKAR HON'BLE MR. JUSTICE DINESH MAHESHWARI For Appellant(s) Mr. Akshat Shrivastava, Adv. Mr. Inderjeet Yadava, Adv. Ms. Manjeet Kirpal, AOR For Respondent(s) Mr. K.Radhakrishnan, Sr. Adv. Mr. Rupesh Kumar, Adv. Ms. Gargi Khanna, Adv. Mrs. Anil Katiyar, AOR UPON hearing counsel Court made following ORDER appeal is allowed in terms of signed order. Pending application(s), if any, shall stand disposed of. (RAJNI MUKHI) (VIDYA NEGI) SENIOR PERSONAL ASSISTANT COURT MASTER (NSH) (Signed order is placed on file) Universal Cables Ltd. v. Commissioner of Income-tax, Jabalpur