Refund interest denied where delayed return was later condoned, since assessee-attributable delay under Section 244A still applied.

Interest on refund under Section 244A does not become payable merely because a delayed return is later condoned for acceptance. Where the delay is attributable to the assessee, Section 244A(2) permits denial of interest, and condonation does not erase the underlying factual cause of delay. Here, the return was filed late due to a belated audit, so the delay remained attributable to the assessee and the refusal of refund interest was justified.

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Issues: Whether interest on refund under Section 244A of the Income-tax Act, 1961 was payable when the return was filed belatedly but the delay was later condoned.

Analysis: Interest on refund accrues in accordance with Section 244A, but Section 244A(2) permits denial of interest where the delay is attributable to the assessee. The return in the present case was filed only after delay caused by belated audit, and the delay was condoned only for accepting the return. Such condonation did not efface the factual cause of delay attributable to the assessee. On those facts, the Commissioner was justified in refusing interest on the refund.

Conclusion: Interest on refund was not payable, and the claim was rightly rejected.

Ratio Decidendi: Condonation of delay in filing a return for the purpose of accepting it does not, by itself, extinguish the assessee's attribution of delay so as to mandate interest on refund under Section 244A where Section 244A(2) applies.

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