-A. Refunds .-(1) Where, as a result of any order passed in appeal or other proceeding including a rectification 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:

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;

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 ] [Added by Act 4 of 1988, Section 150 (w.e.f. 1.4.1989). ] [net wealth] [ Substituted by Act 3 of 1989, Section 73, for " total income " (w.e.f. 1.4.1989).][returned by the assessee.] [Added by Act 4 of 1988, Section 150 (w.e.f. 1.4.1989). ]

(2)

[ Where refund of any amount becomes due to the assessee as a result of an order under this Act or under the provisions of sub-section (1) of section 16 after a return has been made under section 14 or section 15 or in response to a notice under clause (i) of sub-section (4) of section 16 and the Assessing Officer is of the opinion, having regard to the fact that,-

(i) a notice has been issued, or, is likely to be issued, under sub-section (2) of section 16 in respect of the said return; or

(ii) the order is the subject-matter of an appeal or further proceeding; or

(iii) any other proceeding under this Act is pending;

(3)

Where a refund is due to the assessee in pursuance of an order referred to in sub-section (1) and the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 127, for " Wealth-tax Officer " (w.e.f. 1.4.1988).] does not grant the refund within a period of six months from the date of such order, the Central Government shall pay to the assessee simple interest at [six per cent.] [ Substituted by Act 54 of 2003, Section 21, for " eight per cent " . (w.r.e.f. 8.9.2003).] per annum on the amount of refund due from the date immediately following the expiry of the period of six months aforesaid to the date on which the refund is granted.

[(3-A) Where the whole or any part of the refund referred to in sub-section (3) 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 (3) 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 (3) shall be payable to him in respect of the amount so found to be in excess.] [ Inserted by Act 41 of 1975, Section 97 (w.e.f. 1.10.1975).]

(4)

Where a refund is withheld under the provisions of sub-section (2), 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 six months from the date of the order referred to in that sub-section to the date the refund is granted.

[(4-A) The provisions of sub-sections (3), (3-A) and (4) shall not apply in respect of any assessment for the assessment year commencing on the 1st day of April, 1989, or any subsequent assessment year.

(4-B)(a) ] [Inserted by Act 4 of 1988, Section 150 (w.e.f. 1.4.1989). ] [Where refund of any amount becomes due to the assessee under this Act] [ Substituted by Act 3 of 1989, Section 73, for certain words (w.e.f. 1.4.1989).][, he shall, subject to the provisions of sub-section, be entitled to receive, in addition to the said amount, simple interest thereon calculated at the rate of ] [Inserted by Act 4 of 1988, Section 150 (w.e.f. 1.4.1989). ][one-half per cent.] [ Substituted by Act 54 of 2003, Section 21, for " two-third per cent." (w.r.e.f. 8.9.2003).][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 the 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 30 is paid in excess of such demand.

(b) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, 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.

(c) Where as a result of an order under ] [sub-section (3) or sub-section (5) of section 16 or] [ Inserted by Act 3 of 1989, Section 73 (w.e.f. 1.4.1989).][section 17 or section 23 ] [ Inserted by Act 3 of 1989, Section 73 (w.e.f. 1.4.1989).][or section 23-A ] [ Inserted by Act 10 of 2000, Section 75 (w.e.f. 1.6.2000).][or section 24 or section 25 or section 27 or section 29 or section 35 or any order of the Wealth-tax Settlement Commission under sub-section (4) of section 22-D, the amount on which interest was payable under clause (a) 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 30 and the provisions of this Act shall apply accordingly. [Inserted by Act 4 of 1988, Section 150 (w.e.f. 1.4.1989). ]

(d) The provisions of this sub-section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989, and subsequent assessment years.]

(5)

Where under any of the provisions of this Act, a refund is found to be due to any person, the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 127, for " Wealth-tax Officer " (w.e.f. 1.4.1988).] or [[Joint Commissioner] [Substituted by Act 4 of 1988, Section 127, for " Appellate Assistant Commissioner " (w.e.f. 1.4.1988). ][(Appeals)] [Substituted by Act 4 of 1988, Section 127, for " Appellate Assistant Commissioner " (w.e.f. 1.4.1988). ] or [Commissioner (Appeals)] [ Inserted by Act 29 of 1977, Section 39 and ScheduleV (w.e.d. 10.7.1978).] or [Chief Commissioner or Commissioner] [ Substituted by Act 4 of 1988, Section 127, for " Commissioner " (w.e.f. 1.4.1988).] [Inserted by Act 4 of 1988, Section 150 (w.e.f. 1.4.1989). ] 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.

[CHAPTER VII-B] [ Inserted by Act 45 of 1972, Section 14 (w.e.f. 15.11.1972).] Registered Valuers