Bona fide filing before wrong forum cannot defeat limitation, and statutory interest is payable on refunded pre-deposit.

A bona fide appeal filed within time before the wrong Commissioner (Appeals), pursuant to the refund order's own direction, could not be defeated on limitation; the period spent before that forum was excluded, so the appeal remained within time. The refund provision also created a statutory entitlement to interest on the refunded pre-deposit after the prescribed period, and payment of refund without interest was contrary to that mandate. The assessee therefore succeeded both on limitation and on the substantive claim for interest on the refund.

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Issues: (i) Whether the appeal against the refund-related order was filed within limitation when it was first filed before the wrong Commissioner (Appeals) on the basis of the refund order's direction; (ii) whether interest on the refunded pre-deposit was payable as a statutory consequence under the applicable refund provision.

Issue (i): Whether the appeal against the refund-related order was filed within limitation when it was first filed before the wrong Commissioner (Appeals) on the basis of the refund order's direction.

Analysis: The filing before the Commissioner (Appeals), Nagpur was treated as a bona fide filing made in compliance with the instruction contained in the refund order. Even if that forum lacked territorial jurisdiction, the filing was within time and the period during which the matter remained pending before the wrong forum could not be counted against the assessee for limitation purposes. The reasoning adopted exclusion of the time spent before the wrong forum while computing limitation.

Conclusion: The appeal was held to be within limitation and the objection on delay failed.

Issue (ii): Whether interest on the refunded pre-deposit was payable as a statutory consequence under the applicable refund provision.

Analysis: The refund provision was read as conferring a statutory entitlement to interest at the rate linked with section 11BB after the prescribed period. Since the refund was made without interest, the omission was treated as contrary to the statutory mandate governing refund of pre-deposit amounts.

Conclusion: Interest on the refunded amount was held payable in favour of the assessee.

Final Conclusion: The refund order was set aside and the assessee obtained relief both on limitation and on the substantive claim for interest on the refunded pre-deposit.

Ratio Decidendi: A bona fide appeal filed within time before a wrong forum, pursuant to the order itself, cannot be defeated on limitation without excluding the period spent before that forum, and interest on refund becomes payable when the governing refund provision makes it a statutory incident of refund.

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