35[Interest on refunds.
36244A.
(1) 37[Where refund of any amount
becomes due to the assessee under this Act], he shall, subject to the provisions
of this section, be entitled to receive, in addition to the said amount, simple
interest thereon calculated in the following manner, namely :—
(a) where the refund is out of any tax 38[paid under section 115WJ or] 39[collected at source under section 206C or] paid by way of advance tax or
treated as paid under section 199, during the
financial year immediately preceding the assessment year, such interest shall
be calculated at the rate of 40[one-half per cent] for every
month or part of a month comprised in the period from the 1st day of April of
the assessment year to the date on which the refund is granted:
Provided
that no interest shall be payable if the amount of refund is less than ten per
cent of the tax as determined 41[under 42[sub-section (1) of section 115WE or] sub-section (1) of section 143 or] on regular assessment;
(b) in any other case, such interest shall be
calculated at the rate of 43[one-half 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 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 156 is paid in excess of such
demand.
(2) If the proceedings
resulting in the refund are delayed for reasons attributable to the assessee,
whether wholly or in part, the 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.
(3) Where, as a result of
an order under 44[sub-section (3) of section 115WE or section
115WF or section 115WG or] 45[sub-section (3) of section 143 or section 144
or] section 147 or section
154 or section 155 or section
250 or section 254 or section
260 or section 262 or section
263 or section 264 or an order of the
Settlement Commission under sub-section (4) of section
245D, the amount on which interest was payable under sub-section (1) 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 156 and the provisions of
this Act shall apply accordingly.
(4) The provisions of this
section shall apply in respect of assessments for the assessment year
commencing on the 1st day of April, 1989, and subsequent assessment years :]
46[Provided that in respect of assessment of
fringe benefits, the provisions of this sub-section shall have effect as if for
the figures “1989”, the figures “2006” had been substituted.]
