Interest on refund where no claim is needed
14Interest on refund where no claim is needed.
244. (1) Where a refund is due to the assessee in pursuance of an order referred to in section 240 and the Income-tax Officer does not grant the refund within a period of 17[three months from the end of the month in which such order is passed], the Central Government shall pay to the assessee simple interest at 16[fifteen] per cent per annum on the amount of refund due from the date immediately following the expiry of the period of 18[three] months aforesaid to the date on which the refund is granted.
19[(1A) Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee, as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penally and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assesses is liable to pay as tax. or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in Sub-section (I) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted :
Provided that where the amount so found to be in excess was paid in instalments, such interest shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted :
Provided further that no interest under this sub-section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding :
Provided also that where any interest is payable to an assessee under this sub-section, no interest under sub-section (1) shall be payable to him in respect of the amount so found to be in excess.]
(2) Where a refund is withheld under the provisions of section 241, the Central Government shall pay interest at the aforesaid rate on the amount of refund ultimately determined to be due as a result of the appeal or further proceeding for the period commencing after the expiry of [three months from the end of the month in which the order referred to in section 241 is passed] to the date the refund is granted.
14. See rule 119A.
16. Substituted for "twelve" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. Section 84 of the Amendment Act has clarified that interest is to be calculated at the enhanced rate only in respect of the period falling after 30-9-1984. Earlier, it was substituted for "nine" by the Finance Act, 1972, w.e.f. 1-4-1972. "Nine" was substituted for "six" by the Taxation Laws (Amendment) Act, 1967, w.e.f. 1-10-1967 and "six" was substituted for "for" by the Finance Act, 1956, w.e.f. 1-4-1965.
17. Substituted for "six months from the date of such order" by the Taxation Laws (Amendment) Act, 1970, w.e.f 1-4-1971.
18. Substituted for "six" by the Taxation Laws (Amendment) Act, 1970, w.e.f. 1-4-1971,
19. Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975.
[As amended by the Taxation Laws (amendment) Act, 1984]