Section 234D of the Income-tax Act, 1961 , levies interest on the amount by which a refund is reduced. Section 234D was inserted by the Finance Act, 2003 with effect from June 1, 2003. Explanation 2 was inserted by the Finance Act, 2012 with retrospective effect from June 1, 2003 and declares that the provisions of section 234D shall also apply to an assessment year commencing before June 1, 2003, if the proceedings in respect of such assessment year are completed after that date. Sub-section (2) of section 234D of the Act would be attracted only if reduction occurs and it cannot be made applicable when there is an increase. Explanation 2 cannot be read in isolation from sub-section (2) of section 234D of the Act and the entire section should be read as a whole. If such a procedure is adopted, the correct legal position emanates because the charging provision is sub-section (1) of section 234D of the Act. In the sub-section, namely, sub-section (1) , in three places, the expression “regular assessment” occurs, namely, in section 234D(1)(a) , section 234D(1)(b) and the remaining portion of section 234D . An order passed under section 154 cannot be taken to be the framing of a regular assessment for a year. Accordingly the Court held that  the regular assessment was completed under section 143(3) of the Act much prior to June 1, 2003, i. e., On March 30, 2001. Hence, no interest can be charged under section 234D of the Act for the assessment year 1998-99. (AY.1998 -99)