Interest recd on refund

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

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?

shivaji prasad bhimavarapu

shivaji prasad bhimavarapu (Expert)
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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.