Landmark Cases on Interest and Recovery

Interest under section 234C for delayed or deferred advance tax payment is payable only from the date the liability to pay advance tax is incurred. This applies to transactions like capital gains where liability arises after the event.

An assessee is entitled to the adjustment of seized cash against their advance tax liability. Consequently, no interest under sections 234A or 234B can be charged if the department fails to respond to the assessee's request for such an adjustment.

When a refund is granted to an assessee, it must first be adjusted against the correct amount of interest due. Any remaining portion of the refund should then be adjusted against the balance tax liability. This ensures proper calculation of further interest payable to the assessee under Section 244A.

Interest under section 234B needs to be recalculated, affording the assessee a reasonable opportunity of hearing and considering judicial decisions.

Interest under Section 234D of the Income Tax Act is leviable based on the date of completion of the regular assessment, not the year of assessment. If the regular assessment is completed after the amended proviso to Section 234D (effective June 1, 2003) came into force, the assessee is liable to pay interest on the refunded amount.

Payment of tax under section 172(3)/(4) of the Income-tax Act is treated as advance tax, entitling non-residents to refunds and interest on such refunds in case of regular assessment under section 172(7).

If interest on a tax refund is wrongfully retained by the revenue, interest on that retained interest is payable. This is true even if there is no specific provision in the Income Tax Act for payment of interest on interest.

Interest under section 234 cannot be levied if the employer fails to deduct tax at source, as the employee should not be faulted for the employer's default.

An assessee is entitled to interest under Section 244A(1)(b) when a refund arises on account of payment of self-assessment tax.

Interest under section 244A of the Income-tax Act is allowable for the period from the first day of the assessment year up to the date of refund, even if TDS certificates were filed during assessment proceedings, provided the tax was deducted and deposited on time.

Tax paid on self-assessment falls under the residuary clause of Section 244A(1)(b) for refund interest, payable from the date of self-assessment tax payment until the refund date.

For the purpose of calculating interest under section 234C of the Income Tax Act, the date of presentation of a cheque to the bank is considered the date of payment, not the date of clearing.

An assessee is not entitled to interest under Section 244A on the refund of self-assessment tax voluntarily paid under Section 140A.

When an original assessment is set aside in appellate proceedings for a fresh assessment, the period for reckoning interest under sections 234A and 234B is determined by whether the subsequent assessment is considered the first or a regular assessment.

Interest is payable on refund even if the claim for refund is belatedly made during assessment proceedings, provided the delay in refund is not attributable to the assessee. Section 244A(2) of the Act does not disentitle an assessee to interest in such circumstances.

The levy of interest under Section 234-A of the Income Tax Act is statutory, mandatory, and automatic, meaning it cannot be a question of law that can be raised in appeal. The High Court's jurisdiction under Section 260A is limited to questions of law, and thus, observations on the levy of interest are generally outside its scope.

Interest under section 234B is not leviable if the entire income is subject to deduction of tax at source, especially when the assessee has not earned income requiring advance tax payment.

Interest under Sections 234A and 234B is chargeable even if a specific notice for it was not issued by the Assessing Officer. This decision overrules prior views that required such specific notice.

Interest on enhanced compensation accrues year after year from the date of possession until the date of the order granting enhanced compensation, not solely on the date of the court's order.

The difference between the amount payable on maturity and the discounted value of treasury bills at the time of issue is considered interest on securities.

An order charging interest under Section 220(2) of the Income-tax Act, 1961 is not appealable as it is neither part of the assessment order nor specifically provided for under Section 246 of the Act. However, there are conflicting decisions on this issue, and some benches have considered such appeals on merits.

Interest on refund under Section 244A of the Income-tax Act arising to a foreign company is taxed at the Maximum Marginal Rate.

Interest under Section 234D of the Income-tax Act is leviable only when the regular assessment is completed after the provisions of Section 234D came into force. Section 234D was effective from 01.06.2003.

Taxation must be carried out in accordance with law, including provisions for tax collection, rates, and recovery. Excess tax paid, barring unjust enrichment, should be refunded.

Interest is payable by the Revenue to the assessee if the aggregate of installments of Advance Tax or TDS paid exceeds the assessed tax. A later Supreme Court bench referred the question of whether interest is payable on excess advance tax or TDS paid to a larger bench, doubting the correctness of the Sandvik Asia Limited decision on this point.