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March 2012

Interest on refund: Section 244A of Incometax Act, 1961: A.Y. 2002-03: Interest u/s.244A is to be calculated from the date of payment of tax till the date of refund and not from the 1st of April of the assessment year or from date of regular assessment.

By K. B. Bhujle, Advocate
Reading Time 1 mins
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[CIT v. Vijaya Bank, 246 CTR 548 (Kar.)]

For the A.Y. 2002-03, the Assessing Officer granted interest u/s.244A of the Act from the date of regular assessment. The CIT(A) and the Tribunal held that interest should be calculated from the date on which the self-assessment tax was paid by the assessee.

On appeal by the Revenue, the Karnataka High Court upheld the decision of the Tribunal and held as under:

“Where the assessee is entitled to refund of self-assessment tax, interest u/s.244A is to be calculated from the date of payment of tax till the date of refund and not from the 1st of April of the assessment year or from the date of regular assessment.”

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