| Question And Answer | |
|---|---|
| Subject: | ADDITIONAL INT. @ 3% U/S 244A(1A) |
| Category: | Income-Tax |
| Querist: | A.K.Lunawat |
| Answered by: | Law Intern |
| Tags: | additional interest under Section 244A(1A), Section 158A(5), Section 244A(1A) |
| Date: | August 3, 2025 |
Kindly clarify whether for the entitlement of awarding 3% additional interest under section 244A(1A) in a case existence of passed finally appeal or revision order effect of which is involved must be of the same assessee and for the same asst. yr. Can it not be given in other similar facts of the case under section 158A(5) ?
No. The 3% additional interest under Section 244A(1A) can be awarded only when the refund arises due to an order passed in appeal or revision in the assessee’s own case and for the same assessment year. It cannot be extended to other cases with similar facts via Section 158A(5).
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Thanks for your prompt reply.
However Sec. 244A(1A) reads as under –
— In a case where a refund arises as a result of giving effect to an order*** under section 250 or section 254 or section 260 or section 262 or section 263 or section 264
***being in general i.e. Irrespective when & in whose case it has been passed;
As per sec 158A(5) repetative appeals are discouraged so what is the purpose of inserting sec 158A in the IT Act.
Kindly enlighten me with your inerpretation
It is an arguable point. The law is not clear but there is no statutory restriction in Section 244A(1A) or Section 158A(5) that prohibits additional interest in cases involving similar facts but different assessees or assessment years, provided the refund arises from an order giving effect to an appellate decision.
It is worth claiming the additional interest for delayed refunds granted under Section 158A(5).
As per various judgements of Hon’ble S.C., H.C., ITAT., CIT , & CIT(A) , it is now well settled law that in any case no income can be taxed twice i.e. if any income which is already offered for tax in earlier year, although not actually earned in that year , cannot be taxed again in the year of its actual receipt.
Keeping in mind and also realizing various difficulties as faced by common taxpayers in resolving such problems of getting their IT refunds from the IT departments Hon’ble CBDT has wef 1-10-2023 introduced new unique provision in Sec.155(20) Rw Rule 134 by prescribing Form 71 to avoid double taxation of that income as well as to claim refund of excess payments of TDS on such income. Form 71 also are filed in time.
However so far as in my similar case is concerned , as per the provisions of Sec 158A(5) there was no necessity of filing appeal before the Res. CIT(A) for getting IT refund , as the same has been finally decided as stated above. IT refund arose when Deductor deducted on its actual payment. and as such as per Hon’ble CBDT Circular Dt. 26-4-2016 interest on refund started immediately . But however learned ITO has again failed to follow above stated finally passed order within prescribed period, as a result of which am I not entitled for 3% additional interest on IT refund u/s 244A(1A)?
Furthermore if above interpretation is accepted as correct , in future such orders passed U/s 155(20) Rw Rule 134 never be taken seriously by AO and will be kept pending for unlimited period without any fear and worry.
Above referred case is also covered by Sec 244A(3) -abstracted as under–
Sec 244A(3) —Where, as a result of an order under section 155 —– the amount on which interest was payable under sub-section (1) has been increased —— the interest shall be increased —– and the provisions of this Act shall apply accordingly.***
*** Which includes above referred sec 244(1A) also***
Kindly enlighten me in this regard
Thanks