Income tax refund interest under Section 244A continues until actual payment, not merely the refund order date.

Interest on income tax refunds under Section 244A is compensatory and reflects the time value of money; it cannot stop merely because a refund order has been passed if the amount remains unpaid. The expression "refund is granted" must be read to cover actual release of the refund, otherwise the Revenue could withhold payment while denying further interest. Interest is therefore payable up to the date of actual disbursement of the refund amount, and the assessee is entitled to recalculation of interest accordingly.

---

---

Issues: Whether interest on income tax refund under Section 244A of the Income-tax Act, 1961 is payable up to the date of the refund order or up to the date on which the refund amount is actually released to the assessee.

Analysis: Interest under Section 244A is compensatory and is intended to account for the time value of money. The expression "refund is granted" cannot be confined to the date on which an order allowing refund is passed when the amount continues to remain unpaid thereafter. Reading the provision otherwise would permit the Revenue to stop interest by passing an order while still withholding payment of the refund amount.

Conclusion: Interest is payable up to the date of actual release of the refund amount and not merely up to the date of the refund order. The petitioner is entitled to recalculation of interest till 18.10.2019, in its favour.

---