Refund on deleted tax demand must follow appellate relief, with interest payable when no legal basis remains to withhold it.

Where additions made in assessment were deleted in appeal, the corresponding demand ceased to survive and the tax paid against that demand became refundable as consequential relief. The pending directions for enquiry in other assessment years did not justify withholding the refund, especially after the time to pass an order giving effect to the appellate order had expired. With the connected reassessment notices also quashed, there was no surviving legal basis to defer payment. The assessee was therefore entitled to an order giving effect to the appellate order, refund of the tax paid, and interest on the refund under section 244A of the Income-tax Act, 1961.

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Issues: Whether the assessee was entitled to a writ directing the Assessing Officer to give effect to the appellate order, refund the tax already paid against the deleted demand, and grant interest on the refund.

Analysis: The additions made in the assessment were deleted in appeal, so the demand raised on that basis no longer survived. The tax paid against that demand was therefore refundable as a consequential relief, and the refund could not be withheld merely because the appellate authority had also issued directions for enquiry in respect of other assessment years. The statutory time to pass an order giving effect to the appellate order had already expired, and the pendency of reassessment-related steps did not justify retaining a refund arising from the appellate relief. Since the reassessment notices for the connected years had also been quashed, there was no surviving legal basis to defer the refund.

Conclusion: The assessee was held entitled to an order giving effect to the appellate order and to refund of the tax paid, together with interest under section 244A of the Income-tax Act, 1961.

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