Interest on refunds - CBDT cautions field
In terms of section 244A of the Income-tax Act, an assessee is entitled to receive interest on the amount of refund due under the Act. The interest is to be granted simultaneously with the refund and there should normally be no reason to grant refund without adding the entitled interest.
In the case of Sandvik Asia Ltd. v. CIT and others - , the Supreme Court adversely commented upon the delay in grant of interest on refund and awarded compensation to the assessee for the delay by the Department. The Court also recommended that action be initiated against the officers responsible for the delay.
So the Board instructs that
1. while granting refund to the assesses, care should be taken to ensure that any interest payable under section 244A on the amount of refund due should be granted simultaneously with the grant of refund and there should, in no case, be any omission or delay in the grant of such interest.
2. Failure to do so will be viewed adversely and the officer concerned will be held personally accountable, inviting appropriate action.
3. The Range officers should be directed to carry out periodic test checks of cases within their jurisdiction to ensure that provisions of section 244A are scrupulously implemented.
4. These instructions should also be brought to the notice of the officers responsible for conducting internal audit and adherence to these should be checked by the auditing parties.
We reported the case more than a year ago, on 30th January, 2006 to be precise and we are happy that at least after 14 months, the Board has woken up to face facts. Officers should note that if they are careless, they may face the consequences.
INSTRUCTION NO. , Dated: March 28, 2007