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November 2010

Interest on excess refund : S. 234D of Income-tax Act, 1961 : Section came on statute books w.e.f. 1-6-2003 : Provision not retrospective : Interest u/s.234D cannot be charged in respect of refunds granted prior to 1-6-2003.

By K. B. Bhujle | Advocate
Reading Time 1 mins

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Unreported :


12. Interest on excess
refund : S. 234D of Income-tax Act, 1961 : Section came on statute books w.e.f.
1-6-2003 : Provision not retrospective : Interest u/s.234D cannot be charged in
respect of refunds granted prior to 1-6-2003.

[CIT v. M/s. Bajaj
Hindustan Ltd. (Bom.), ITA No. 198 of 2009 dated 15-4-2009]

In an appeal by the Revenue
the following question was raised before the Bombay High Court :

“Whether in the facts and
circumstances of the case and in law the ITAT was right in holding that the
interest u/s.234D cannot be charged in respect of refunds granted prior to
1-6-2003 ?”

The High Court upheld the
decision of the Tribunal and held as under :

“It is seen that the
subject provision came on statute book w.e.f. 1-6-2003. If that be so, the
said provision does not have retrospective effect. In this view of the matter
we do not see the appeal giving rise to any substantial question of law.”

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