In Brief
The assessee filed income tax returns and paid Rs. 3.23 crores; the assessment found Rs. 2.03 crores refundable. The Department retained and adjusted this amount against other year's demands instead of immediately refunding it. The assessee sought interest for the retention period. The lower authorities and High Court awarded interest under Section 244(1A) of the Income Tax Act. The Supreme Court upheld this, holding that when a refundable amount is kept and utilized by the Revenue, interest is payable even though the amount was ultimately refunded.
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