Interest on refund

Law does not provide for punitive interest for delays on the part of revenue. You have to be satisfied with the interest amount you received as per law. Bad news is that interest amount is again taxable in your hand and you have to discharge your tax liability on such interest in the year, in which it is received.

Thank you Sir for your valuable reply. I have 2 more queries. 

1.  Are there any case laws, etc wherein individuals/corporates/etc would have successfully won cases against the department for compensation against delays. 

2.  Can I file a case against the IT deptt in the Consumer Court / Civil Court for compensation for delays?

Thanks.. Preeti Mohan

Thank you Sir for your valuable reply. I have 2 more queries. 

1.  Are there any case laws, etc wherein individuals/corporates/etc would have successfully won cases against the department for compensation against delays. 

2.  Can I file a case against the IT deptt in the Consumer Court / Civil Court for compensation for delays?

Thanks.. Preeti Mohan

1. There is no precedent available wherein the courts have directed the department to pay punitive interest.

2. You not being a consumer, Consumer Courts would not entertain you and the Act itself protects the departments against any action (except writs) to be entertained by civil courts.

Dear Mr Chugh... am sorry to go back to the same matter. Just one query - do you think I could win the matter if I go ahead with a writ in Delhi High Court on compensation for delays. I suppose a number of writs would already have gone to the High Courts in this regard - would they have succeeded?

Thanks & Regards... P Mohan

Looking back to your querry I noticed

a) Your assessment was completed after a delay of one year 

In this regard please note the law provide for various time limits to finish/complete/finalise assessment beyond that it becomes time barred. In case your assessment is not invalid and time barred by limitation, the same has been completed within the permissible time available under the law and you are not entitled any interest beyond as prescribed under section 244A. The department must have paid you that. In case of any short fall or deficiency in that you may move application u/s 154 for rectification of interest calculation before jurisdictional assessing officer.

b) Your refund was further delayed by one year after assessment.

The department is bound to issue refund/demand notice alongwith assessment order and pay interest as prescribed under section 244A of the Income-tax Act.

The act itself is sovergn and enjoys immunity. There is no precedence in my knowledge where in a Writ the Court has directed the Department to pay punitive interest.

Thx

Thank you Mr Chugh for your invaluable feedback.

Thanks... PMohan