Interest on excess refund.234D.
(1) Subject to the other provisions of this Act, where any refund is granted to the assessee
under sub-section (1) of section 143
, and— (a
) no refund is due on regular assessment; or (b
) the amount refunded under sub-section (1) of section 143
exceeds the amount refundable on regular assessment,the assessee shall be liable to pay simple interest
at the rate of one-half per cent on the whole or the excess amount so refunded, for every month or part of a month comprised in the period from the date of grant of refund to the date of such regular assessment.(2) Where, as a result of an order under 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 of refund granted under sub-section (1) of section 143
is held to be correctly allowed, either in whole or in part, as the case may be, then, the interest chargeable, if any, under sub-section (1) shall be reduced accordingly.
for the purposes of this section.
—For the removal of doubts, it is hereby declared that the provisions of this section shall also apply to an assessment year
commencing before the 1st day of June, 2003 if the proceedings in respect of such assessment year is completed after the said date.