Interest on delayed refund

[Ashish Gupta]

We had filed income tax return for A.Y. 2008-09 with refund of Rs. 41,24,500 and received Income tax assessment order and part refund of Rs. 134000 on 5th May 2010 related with our A.Y. 2008-09 and our remaining part refund of Rs. 39,90,500 has adjusted against payment of Dividend distribution tax whereas we had paid DDT through separate challan now we are filing rectification application. Kindly advice whether we should apply for interest on Rs. 39,90,500 which IT Dept. has not paid us and wrongly adjusted, if yes then how?

[Naresh Bansal]

File application under section 154 for rectification, attach copy of Challan of Rs 3990500 for DDT deposited by you and ask for refund along with interest.

[DEV KUMAR KOTHARI]

Your rectification petition should be for reversal of tax adjustment for DDT, as it was paid by you separately and there was no dues for DDT and the adjustment is a mistake apparent from records. Interest u/s 244A on full amount of refund due to you as per return w.e.f. 01.04.2008 till the refund is actually granted by issue of cheque or ECS. You can also claim for interest on interest due to delayed refund. Incidentally Mr.Gupta I saw your profile, and found that you have not contributed any answer/ reply to queries,and articles. You have raised many interesting issues. Considering the same we readers, expect some contirbution from you also in form of replies, articles etc. for enrichment of knowledge, experience gained by you. And this will also serve purpose of discussion forum. I hope you will take this in right spirit and perspective.

[Ashish Gupta]

I realize this and shall try to share my knowledge in the duscussion forum. Thanks Mr. Kothari and Bansal.

[DEV KUMAR KOTHARI]

Dear Mr. Ashish Gupta, I read your reply of 120710. You can easily start the exercise by summing up views expressed by other readers on your queries, updating knowledge and information base and drawing final conclusions ( which may be final decision taken by you on the issue)

AI Summary

Interest on delayed tax refund can be claimed where department wrongfully adjusted refund, pending till actual payment.
Seek rectification to reverse the incorrect adjustment of the refund by submitting a rectification application supported by the DDT challan showing DDT was paid separately, and claim statutory interest on the full refund amount from the prescribed commencement date until actual payment, including interest on interest where applicable.