Tax refund interest under section 244(1A) includes only the excluded one-month period, favouring the taxpayer's construction.

Section 244(1A) was construed as an independent provision granting interest on tax refunds from the date of payment, subject only to exclusion of the one-month period after the appellate or other order. The Court relied on the different language used in section 244(1) to indicate a distinct legislative intent, and held that the construction favourable to the taxpayer should apply where two views are possible. The departmental circular was also treated as consistent with this reading. On that basis, the Tribunal's interpretation of section 244(1A) was upheld and the Revenue was not entitled to a reference on the proposed question of law.

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Issues: Whether, on a proper construction of the second proviso to section 244(1A) of the Income-tax Act, 1961, interest on refund is payable after excluding only the one-month period from the date of the appellate or other order, and whether the Tribunal was right in holding that no referable question of law arose.

Analysis: The provision was read as an independent enabling provision granting interest on refunds from the date of payment of tax, with only a one-month period excluded by the second proviso. A comparison with section 244(1) showed that Parliament used different language for the two situations, and the later provision indicated an intention to confer interest except for the specified one-month period. The Court also noted that, even if two views were possible, the construction favourable to the taxpayer had to be adopted. The departmental circular was consistent with that reading.

Conclusion: The Tribunal's construction of section 244(1A) was correct, and the Revenue was not entitled to a reference on the question proposed.

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