Refund interest during reassessment accrues only after final assessment, not from the first refund application.

Where a refund claim is made while reassessment proceedings are pending, the second proviso to the refund provision bars grant of refund until the reassessment is finalised. On that reading, interest on the refundable amount does not accrue from the date of the first refund application merely because the original assessment generated a refundable balance; it becomes payable only after the assessment for the relevant year is finally concluded. The assessee's claim for earlier interest was therefore rejected, and entitlement to interest was confined to the period after finalisation of reassessment.

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Issues: Whether the assessee was entitled to interest on the refunded amount from the date of the first refund application when the assessment had been reopened under reassessment proceedings.

Analysis: The refundable amount arose from an assessment that was subsequently subjected to reassessment on the basis of alleged suppression and misrepresentation in the return. The statutory scheme was read as a whole, especially the provisions governing reassessment, refund, and interest on refundable amounts. The second proviso to the refund provision was treated as controlling during the pendency of reassessment, because it bars refund claims until reassessment is finalized. Interest under the provision for interest on refundable amounts was held to become payable only after the assessment for the relevant year stands finally concluded, not from the date of the first application where the refund remained under the shadow of reassessment.

Conclusion: The assessee was not entitled to interest from the date of the first refund application. Interest, if any, became payable only after finalization of the reassessment, and the claim for earlier interest was rejected.

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