20 October 2012
A company has recd interest on refund as per 143(1) alongwith interest. Later in regular assessment tax was found payable by the assessee cancelling his refund and raising a demand. Should the interest on refund be also paid back to I-T as the refund was never due to the assessee?
20 October 2012
Yes.Sec 234D of IT Act deals with this.This section applies when there is when there is NO refund on regular assessment but refund granted u/s143(1) earlier or the refund under 143(1) granted earlier exceeds the amount refundable on regular assessment.Interest @0.5% per month or part of month on the amount refunded or excess refunded is payable commencing from date of refund granted to the date of regular assessment.
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