Refund interest under Section 244A must run until actual payment, with rectification claims decided expeditiously.

Interest on refund under Section 244A is to be computed up to the date of actual payment, not merely up to an earlier order date, and the Department was directed to recalculate and pay the balance interest accordingly. In relation to a short-refund claim, the Assessing Officer was directed to dispose of the rectification application within a fixed time and to consider statutory interest on the amount ultimately found payable up to the date of payment. The note reflects limited relief focused on refund interest computation and expeditious rectification handling.

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Issues: (i) Whether the Department was required to recompute and pay interest on the refund for A.Y. 2009-10 up to the date of actual payment under Section 244A of the Income-tax Act, 1961. (ii) Whether the Assessing Officer was to decide the rectification application for A.Y. 2008-09 within a fixed time and consider interest on the balance refund till the date of payment.

Issue (i): Whether the Department was required to recompute and pay interest on the refund for A.Y. 2009-10 up to the date of actual payment under Section 244A of the Income-tax Act, 1961.

Analysis: The refund for A.Y. 2009-10 had already been issued, but interest had been calculated only up to the earlier order date. The relief sought was confined to recalculation of interest up to the date on which the refund was actually granted.

Conclusion: The Department was directed to calculate interest under Section 244A up to 31st July 2025 and pay the same within four weeks, in favour of the petitioner.

Issue (ii): Whether the Assessing Officer was to decide the rectification application for A.Y. 2008-09 within a fixed time and consider interest on the balance refund till the date of payment.

Analysis: For A.Y. 2008-09, the petitioner had already moved a rectification application in respect of the short-refunded amount. The relief sought was limited to expeditious disposal of that application and consideration of statutory interest on the refund component ultimately found payable.

Conclusion: The Assessing Officer was directed to dispose of the rectification application within eight weeks and to take into account interest under Section 244A till the date of payment, in favour of the petitioner.

Final Conclusion: The writ petition was disposed of with directions granting limited monetary and procedural reliefs to the petitioner concerning refund interest and rectification for the two assessment years.

Ratio Decidendi: Interest on refund under Section 244A is to be computed up to the date of actual refund/payment, and rectification proceedings concerning short-refund relief may be directed to be decided expeditiously with consideration of such statutory interest.

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