Statutory refund interest rate controls excess payment under the Income-tax Act; interest above the prescribed rate was set aside.

Refund interest under the Income-tax Act is governed by the statutory rate in section 244-A, and interest cannot be sustained beyond 6% per annum without legal authority. The dispute was confined to the rate applied on refunded amounts; the Supreme Court noted that an earlier interim order had stayed only the excess over 6%. The award of interest at 15% per annum was therefore set aside to the extent it exceeded the statutory rate, and the excess interest was directed to be refunded to the Department.

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Issues: Whether interest on the refund could be awarded at 15% per annum when the statutory rate under section 244-A of the Income-tax Act, 1961 is 6% per annum.

Analysis: The appeal was confined to the rate of interest granted on the refunded amounts. The statutory scheme fixed interest under section 244-A at 6% per annum. The Court noted that an earlier interim order had stayed the direction only to the extent it exceeded 6% per annum, and that compliance with the High Court's order had already taken place by that time.

Conclusion: The award of interest in excess of 6% per annum was set aside to that extent, and the respondent was directed to refund the excess interest amount to the Department.

Final Conclusion: The relief was restricted to correction of the interest component, and the Department succeeded on the question of excess refund interest.

Ratio Decidendi: Interest on refund is governed by the statutory rate prescribed under section 244-A of the Income-tax Act, 1961, and cannot be sustained beyond that rate absent legal authority.

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