Chapter XIX
Refunds
237. If any person satisfies the [Assessing]
Officer that the amount of tax paid by him or on his behalf or treated as paid
by him or on his behalf for any assessment year exceeds the amount with which
he is properly chargeableunder this Act for that
year, he shall be entitled to a refund of the excess.
Person entitled to claim
refund in certain special cases.
238. (1) Where the income
of one person is included under any provision of this Act in the total income
of any other person, the latter alone shall be entitled to a refund under this
Chapter in respect of such income.
[(1A) Where the value of fringe benefits
provided or deemed to have been provided by one employer is included under any
provisions of Chapter XII-H in the value of fringe benefits provided or deemed
to have been provided by any other employer, the latter alone shall be entitled
to a refund under this Chapter in respect of such fringe benefits.]
(2) Where
through death, incapacity, insolvency, liquidation or other cause, a person is
unable to claim or receive any refund due to him, his legal representative or
the trustee or guardian or receiver, as the case may be, shall be entitled to
claim or receive such refund for the benefit of such person or his estate.
Form of claim for refund
and limitation.
239. (1) Every claim for refund under this Chapter
shall be made in the prescribed form and verified in the prescribed manner.
[(2) No such claim shall be allowed, unless it
is made within the period specified hereunder, namely :—
(a) where the claim
is in respect of income which is assessable for any assessment year commencing
on or before the 1st day of April, 1967, four years from the last day of such
assessment year;
(b) where the claim
is in respect of income which is assessable for the assessment year commencing
on the first day of April, 1968, three years from the last day of the
assessment year;
(c) where the claim
is in respect of income which is assessable for any other assessment year, [one]
year from the last day of such assessment year;]
[(d) where the claim is in respect of fringe benefits which are
assessable for any assessment year commencing on or after the first day of
April, 2006, one year from the last day of such assessment year.]
240. Where, as a result of any order passed in appeal
or other proceeding under this Act, refund of any amount becomes due to the assessee, the [Assessing] Officer shall, except as
otherwise provided in this Act, refund the amount to the assessee
without his having to make any claim in that behalf:
[Provided that where, by the order
aforesaid,—
(a) an assessment
is set aside or cancelled and an order of fresh assessment is directed to be
made, the refund, if any, shall become due only on the making of such fresh
assessment;
(b) the assessment
is annulled, the refund shall become due only of the amount, if any, of the tax
paid in excess of the tax chargeable on the total income returned by the assessee.]
Power to withhold refund in certain cases.
241. [Omitted by the Finance Act, 2001, w.e.f. 1-6-2001.]
Correctness of assessment not to be
questioned.
242. In a claim under this Chapter, it shall not
be open to the assessee to question the correctness
of any assessment or other matter decided which has become final and conclusive
or ask for a review of the same, and the assessee
shall not be entitled to any relief on such claim except refund of tax wrongly
paid or paid in excess.
243. [(1) If the [Assessing] Officer does not
grant the refund,—
(a) in any case where the total income of
the assessee does not consist solely of income from
interest on securities or dividends, within three months from the end of the
month in which the total income is determined under this Act, and
(b) in any other case,
within three months from the end of the month in which the claim for refund is
made under this Chapter,
the Central
Government shall pay the assessee simple interest at [fifteen]
per cent per annum on the amount directed to be refunded from the date
immediately following the expiry of the period of three months aforesaid to the
date of the order granting the refund.
Explanation.—If the delay in granting the refund within
the period of three months aforesaid is attributable to the assessee,
whether wholly or in part, the period of the delay attributable to him shall be
excluded from the period for which interest is payable.]
(2) Where
any question arises as to the period to be excluded for the purposes of
calculation of interest under the provisions of this section, such question
shall be determined by the [Chief Commissioner or Commissioner] whose decision
shall be final.
[(3) The provisions of this section shall not apply
in respect of any assessment for the assessment year commencing on the 1st day
of April, 1989 or any subsequent assessment years.]
Interest on refund where no claim is needed.
244. (1) Where a refund is due to the assessee in pursuance of an order referred to in section
240 and the [Assessing] Officer does not grant the refund within a period of [three
months from the end of the month in which such order is passed], the Central
Government shall pay to the assessee simple interest
at [fifteen] per cent per annum on the amount of refund due from the date
immediately following the expiry of the period of [three] months aforesaid to
the date on which the refund is granted.
[(1A) Where the whole or any part of the
refund referred to in sub-section (1) is due to the assessee,
as a result of any amount having been paid by him after the 31st day of March,
1975, in pursuance of any order of assessment or penalty and such amount or any
part thereof having been found in appeal or other proceeding under this Act to
be in excess of the amount which such assessee is
liable to pay as tax or penalty, as the case may be, under this Act, the Central
Government shall pay to such assessee simple interest
at the rate specified in sub-section (1) on the amount so found to be in excess
from the date on which such amount was paid to the date on which the refund is
granted :
Provided that where the amount so found to be in
excess was paid in instalments, such interest shall
be payable on the amount of each such instalment or
any part of such instalment, which was in excess,
from the date on which such instalment was paid to
the date on which the refund is granted :
Provided
further that no interest
under this sub-section shall be payable for a period of one month from the date
of the passing of the order in appeal or other proceeding :
Provided
also that where any interest
is payable to an assessee under this sub-section, no
interest under sub-section (1) shall be payable to him in respect of the amount
so found to be in excess.]
(2) Where a
refund is withheld under the provisions of section 241, the Central Government
shall pay interest at the aforesaid rate on the amount of refund ultimately
determined to be due as a result of the appeal or further proceeding for the
period commencing after the expiry of [three months from the end of the month
in which the order referred to in section 241 is passed] to the date the refund
is granted.
[(3) The provisions of this section shall not
apply in respect of any assessment for the assessment year commencing on the
1st day of April, 1989, or any subsequent assessment years.]
244A. (1) [Where refund of any amount becomes due
to the assessee under this Act], he shall, subject to
the provisions of this section, be entitled to receive, in addition to the said
amount, simple interest thereon calculated in the following manner, namely :—
(a) where the refund is out of any tax [paid
under section 115WJ or] [collected at source under section 206C or]
paid by way of advance tax or treated as paid under section 199, during the
financial year immediately preceding the assessment year, such interest shall
be calculated at the rate of [one-half per cent] for every month
or part of a month comprised in the period from the 1st day of April of the
assessment year to the date on which the refund is granted:
Provided
that no interest shall be payable if the amount of refund is less than ten per
cent of the tax as determined [under [sub-section (1) of section 115WE or]
sub-section (1) of section 143 or] on regular assessment;
(b) in any other
case, such interest shall be calculated at the rate of [one-half per cent] for
every month or part of a month comprised in the period or periods from the date
or, as the case may be, dates of payment of the tax or penalty to the date on
which the refund is granted.
Explanation.—For the purposes of this clause, “date of
payment of tax or penalty” means the date on and from which the amount of tax
or penalty specified in the notice of demand issued under section 156 is paid
in excess of such demand.
(2) If the
proceedings resulting in the refund are delayed for reasons attributable to the
assessee, whether wholly or in part, the period of
the delay so attributable to him shall be excluded from the period for which
interest is payable, and where any question arises as to the period to be
excluded, it shall be decided by the Chief Commissioner or Commissioner whose
decision thereon shall be final.
(3) Where,
as a result of an order under [sub-section (3) of section 115WE or section
115WF or section 115WG or] [sub-section (3) of section 143 or section 144
or] section 147 or section 154 or section 155 or section 250 or section 254 or
section 260 or section 262 or section 263 or section 264 or an order of the
Settlement Commission under sub-section (4) of section 245D, the amount on
which interest was payable under sub-section (1) has been increased or reduced,
as the case may be, the interest shall be increased or reduced accordingly, and
in a case where the interest is reduced, the Assessing Officer shall serve on
the assessee a notice of demand in the prescribed
form specifying the amount of the excess interest paid and requiring him to pay
such amount; and such notice of demand shall be deemed to be a notice under
section 156 and the provisions of this Act shall apply accordingly.
(4) The
provisions of this section shall apply in respect of assessments for the
assessment year commencing on the 1st day of April, 1989, and subsequent
assessment years :]
[Provided that in respect of
assessment of fringe benefits, the provisions of this sub-section shall have
effect as if for the figures “1989”, the figures “2006” had been substituted.]
Set off of refunds
against tax remaining payable.
245. Where under any of the provisions of this
Act, a refund is found to be due to any person, the [Assessing] Officer, [Deputy
Commissioner (Appeals)] [, Commissioner (Appeals)] or [Chief Commissioner or Commissioner],
as the case may be, may, in lieu of payment of the refund, set off the amount
to be refunded or any part of that amount, against the sum, if any, remaining
payable under this Act by the person to whom the refund is due, after giving an
intimation in writing to such person of the action proposed to be taken under
this section.