Interest u/s 234D

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sequence of events

1.the refund is paid to the assessee for the A.Y.2008-09 on 18.01.2010

2.the order u/s 143(3) is passed on 21.12.2010

3.the refund already paid on 18.01.2010 is less than refund calculated in the order passed u/s 143(3)

Query:

1.whether the AO can charge interest u/s 234D in this case?

Replies (5)

 

INTEREST U/S 234D:
Interest @ 0.5% is levied under this Section when any refund
is granted to the assessee u/s 143(1) and on regular assessment it
is found that either no refund is due or the amount already refunded
exceeds the refund determined on regular assessment.  The said
interest is levied @ 0.5% on the whole or excess amount so
refunded for every month or part thereof from the date of grant of
refund to the date of such regular assessment.

In this case where refund is not received by the assessee earlier and the same has been received on regular assessement U/s 143(3). 

If any amount of refund is due to the assessee then he is eligible to get interest @ 0.5%

for every month or part of the month. Pl refer Section 244A.

 

Hence in my opinion AO can not charge the interest. In stead of it interest should be paid to the assessee.

paras sir, 

 

interest is already paid to assessee, ( see note 1) of query

It appears that that the Assessing Officer has granted more refund u/s 143(3) than under 143(1).  This means that over and above the refund paid u/s 143(1), the assessee is also getting refund u/s 143(3).  Where is question of charging interest u/s 234D? ( I hope that I have understood the question correctly)

I support Mr. U.S. Sharma. Refund has alsready been granted to the asessee. later on, asst U/s 143 (3) reveals that refund granted was less than refund due. Hence, the excess amt of refund is recievable from assessee alongwith interest u/s 234D @ 0.5 .


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