Interest u/s. 234D

This query is : Resolved

Junoon (Querist)
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08 February 2011 Refund is granted to assessee u/s. 143(1) which was comprising of tax refundable as per return of income and interest u/s. 244A. Further, on regular assessment, returned income accepted as such and tax refundable arrived at par with return of income. Can department levy interest u/s. 234D of the Act on account of interest u/s. 244A granted by holding that interest u/s. 244A is nothing but excess refund.

Example
Refund as per Return = Rs. 100/-
Refund order u/s. 143(1) = Rs. 110/- (Rs. 10 is interest u/s. 244A)
Regular Assessment (Net tax refundable = Rs. 100)
Excess refund u/s. 234D = Rs. 10 (110-100)

Is it justified? Please quote relevant citation if any. Thanks in advance.

Guest

Guest (Expert)

08 February 2011 Is it not justified. Law is very clear.