Interest on refund consequential orders under section 244A(1A) applies where the giving-effect order is passed after commencement.

Interest under section 244A(1A) of the Income-tax Act, 1961 is payable where a refund arises from a consequential order giving effect to an appellate order passed after 1 June 2016, when the provision became operative. The Tribunal accepted the view that such post-1 June 2016 consequential orders attract interest on the resulting refund and followed the clarified departmental position and supporting precedent. The assessee was therefore held entitled to the interest, and the matter was restored to the Assessing Officer to grant it after providing an opportunity of hearing.

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Issues: Whether interest under section 244A(1A) of the Income-tax Act, 1961 was payable on a refund arising from a consequential order passed after the provision came into force.

Analysis: The refund arose pursuant to a consequential order giving effect to the appellate order, and that order was passed after 01.06.2016, when section 244A(1A) became operational. The Tribunal accepted the legal position that interest is allowable on refunds determined through such post-01.06.2016 consequential orders and followed the clarified departmental position and supporting precedent.

Conclusion: The assessee is entitled to interest under section 244A(1A) of the Income-tax Act, 1961, and the matter was restored to the Assessing Officer for granting the interest after providing an opportunity of hearing.

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