| Question And Answer | |
|---|---|
| Subject: | INTERPRETATION OF SEC 244A(3) |
| Category: | Income-Tax |
| Querist: | Sushila Lunawat |
| Answered by: | Law Intern |
| Tags: | 244A, additional interest under Section 244A(1A), Section 244A(1A) |
| Date: | August 24, 2025 |
Can additional 3% interest be awarded on IT Refund U/s 244A(1A) Rw 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
In my view, the additional interest u/s 244A(1A) is applicable only in cases where refund arises due to appellate/revisional orders specified in Sec. 244A(1A).
Section 244A(1A)
“(1A) 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, wholly or partly, otherwise than by making a fresh assessment or reassessment, the assessee shall be entitled to receive, in addition to the interest payable under sub-section (1), an additional interest on such amount of refund calculated at the rate of three per cent per annum, for the period beginning from the date following the date of expiry of the time allowed under sub-section (5) of section 153 to the date on which the refund is granted.”
Sec. 244A(3) increases/ reduces the quantum and period of interest, but it does not expand the class of cases eligible for additional 3%.
Section 244A(3)
“(3) Where, as a result of an order under sub-section (3) of section 115WE or section 115WF or section 115WG or sub-section (3) of section 143 or section 144 or section 147 or 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 on which interest was payable under sub-section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall be deemed to be a notice under section 156 and the provisions of this Act shall apply accordingly.”
The words “and the provisions of this Act shall apply accordingly” go with “shall be deemed to be a notice under section 156“.
So, if the refund does not qualify for Section 244A(1A) (e.g., if it’s a regular refund not tied to appeal or revision proceedings), Section 244A(3) would only affect the interest under Section 244A(1).