Law:

Section:

Section 244 of the Income-tax Act, 1961 - Refunds - Interest where no claim is needed - Assessee had paid excess tax and, as such, an order of refund was passed - In respect of assessment years 1962-63 to 1977-78, refund was made on 21-5-1992 and in respect of assessment years 1978-79 to 1979-80 refund was made on 24-5-1993 - However, at time of making payment of refund, no interest was paid in terms of section 244(1A) - Subsequently, such interest was paid on 23-4-1996 for both period - Assessee claimed further interest for delay in paying interest after a lapse of about four years - Whether in view of decision of Supreme Court in case of CIT v. Narendra Doshi [2002] 122 Taxman 717 and Sandvik Asia Ltd. v. CIT [2006] 150 Taxman 591 , assessee was entitled to interest as claimed - Held, yes [In favour of assessee] FACTS The assessee had paid excess tax and, as such, an order of refund was passed. In respect of the assessment years 1962-63 to 1977-78, refund was made on 21-5-1992. Similarly, for the assessment years 1978-79 to 1979-80, refund was made on 24-5-1993. However, at the time of making refund, no interest was paid in terms of section 244(1A). Interest was paid on 23-4-1996 for both periods although same was ought to have been paid earlier on 21-5-1992 and 24-5-1993 respectively. In view of such fact, the assessee complained before the authority that he should be entitled to get further interest on delayed payment of interest in terms of section 244(1A). Such demand was turned down by the income-tax authority. In the circumstances, the assessee filed writ petition praying for direction to the Income-tax department to pay interest at the rate of 15 per cent per annum for the delay in paying interest after the lapse of about four years from date of refund. The Single Judge dismissed the petition. On writ appeal : HELD The first question that arose for determination in the instant appeal was whether a law declared by the Supreme Court on interpretation of a statutory provision is binding prospectively. [Para 10] The law on that point is now settled. Supreme Court held in the case of M.A. Murthy v. State of Karnataka AIR 2003 SC 3821 that there shall be no…

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