Section 244A interest on refund from TDS and MAT credit applies from 1 April where return is timely filed.

Interest under section 244A was held applicable on a refund arising from TDS credit and the consequential rectification giving effect to MAT credit. The original return under section 139(1) was treated as the relevant return for computing interest, and the refund was brought within section 244A(1)(a)(i), which allows interest from 1 April of the assessment year until the date of refund where the return is filed in time. The small-refund limitation did not defeat entitlement once the revised refund became payable. Interest was therefore payable from 1 April 2017 until the refund was granted.

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Issues: Whether the assessee was entitled to interest under section 244A on the refund arising from tax deducted at source and the consequential rectification, and from which date such interest was payable.

Analysis: The refund arose from TDS credit available with the assessee, and the original return under section 139(1) was treated as the relevant return for computing interest. The rectification order under section 154 increased the refund by giving effect to the available MAT credit, and section 244A applied to such refund. On the facts, the refund fell within section 244A(1)(a)(i), which provides interest from 1 April of the assessment year up to the date of grant of refund where the return is furnished within time. The limitation in section 244A concerning small refunds did not displace the assessee's entitlement once the revised refund became payable.

Conclusion: The assessee was entitled to interest under section 244A from 1 April 2017 up to the date of grant of refund, and the claim was allowed.

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