13[CHAPTER VIIA
REFUNDS
Refunds.
34A. (1) Where,
as a result of any order passed in appeal or other proceeding (including a
rectification proceeding) under this Act, refund of any amount becomes due to
the assessee, the 14[Assessing Officer] shall, except as otherwise provided in this Act,
refund the amount to the assessee without his having to make any claim in that
behalf:
15[Provided that where, by the order aforesaid,—
(a) an
assessment is set aside or cancelled and an order of fresh assessment is
directed to be made, the refund, if any, shall become due only on the making of
such fresh assessment;
(b) the
assessment is annulled, the refund shall become due only of the amount, if any,
of the tax paid in excess of the tax chargeable on the 16[net wealth] returned by the assessee.]
17[(2) Where refund of any amount becomes due to the
assessee as a result of an order under this Act or under the provisions of
sub-section (1) of section 16 after a return has been made under section 14 or
section 15 or in response to a notice under clause (i) of sub-section
(4) of section 16 and the Assessing Officer is of the opinion, having regard to
the fact that—
(i) a notice has been issued, or is likely to be issued, under
sub-section (2) of section 16 in respect of the said return; or
(ii) the order is the subject-matter of an appeal or further
proceeding; or
(iii) any other proceeding under this Act is pending,
that the grant of the refund is likely to
adversely affect the revenue, the Assessing Officer may, with the previous
approval of the Chief Commissioner or Commissioner, withhold the refund till
such time as the Chief Commissioner or Commissioner may determine.]
(3) Where a refund is due to the
assessee in pursuance of an order referred to in sub-section (1) and the 18[Assessing Officer] does not grant the refund
within a period of six months from the date of such order, the Central
Government shall pay to the assessee simple interest at 19[six per cent] per annum on the amount of refund due from
the date immediately following the expiry of the period of six months aforesaid
to the date on which the refund is granted.
20[(3A) Where the whole or any part of the refund referred to in
sub-section (3) 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 penalty 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 assessee 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 (3) 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 instal-ments, 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 (3) shall be payable to him in respect of the amount
so found to be in excess.]
(4) Where a refund is withheld under the provisions of sub-section
(2), 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 six months
from the date of the order referred to in that sub-section to the date the refund is granted.
21[(4A) The provisions of sub-sections (3), (3A) and (4) shall not apply
in respect of any assessment for the assessment year commencing on the 1st day
of April, 1989, or any subsequent assessment year.
(4B) (a) 22[Where refund of any amount becomes due to the assessee under this Act],
he shall, subject to the provisions of this sub-section, be entitled to
receive, in addition to the said amount, simple interest thereon calculated at
the rate of 23[one-half] 24[***] per cent for every month or part of a month comprised in the
period or periods from the date or, as the case may be, dates of payment of the
tax or penalty to the date on which the refund is granted.
Explanation.—For the
purposes of this clause, “date of payment of the tax or penalty” means the date
on and from which the amount of tax or penalty specified in the notice of
demand issued under section 30 is paid in excess of such demand.
(b) If the proceedings
resulting in the refund are delayed for reasons attributable to the assessee,
whether wholly or in part, period of the delay so attributable to him shall be
excluded from the period for which interest is payable and where any question
arises as to the period to be excluded, it shall be decided by the Chief
Commissioner or Commissioner whose decision thereon shall be final.
(c) Where as a result of an
order under 25[sub-section (3) or sub-section (5) of section 16 or] section 17 or
section 23 26[or section 23A] or section 24 or section 25 or section 27 or section 29
or section 35 or any order of the Wealth-tax Settlement Commission under
sub-section (4) of section 22D, the amount on which interest was payable under
clause (a) has been increased or reduced, as the case may be, the
interest shall be increased or reduced accordingly and, in a case where the
interest is reduced, the Assessing Officer shall serve on the assessee a notice
of demand in the prescribed form
specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall
be deemed to be a notice under section 30 and the provisions of this Act shall
apply accordingly.
(d) The provisions of
this sub-section shall apply in respect of assessments for the assessment year
commencing on the 1st day of April, 1989, and subsequent assessment years.]
(5) Where under any of the provisions of this Act, a refund is found to
be due to any person, the 27[Assessing Officer], 28[Deputy Commissioner Appeals)], 29[Commissioner (Appeals)] or 30[Chief Commissioner or Commissioner], as the
case may be, may, in lieu of payment of the refund, set off the amount to be
refunded or any part of that amount, against the sum, if any, remaining
payable under this Act by the person to whom the refund is due, after giving an
intimation in writing to such person of the action proposed to be taken under
this section.]