What is ‘fresh assessment’ and resolving controversy about eligibility for interest @ 9% pa on income-tax refund?

V. K. SUBRAMANI – [2021] 133 taxmann.com 46 (Article)

The provisions of income-tax law mandate the taxpayers to pay advance tax by adopting the concept of ‘pay as you earn’. Thus every taxpayer who is liable to pay advance tax must pay the same as per the prescribed installments and within the prescribed dates. Of course, there are certain exceptions/exemptions from payment of advance tax. Besides this, a taxpayer may receive incomes in respect of which tax is deductible at source or payments for which excess amounts are payable by way of tax collectible at source. Thus the tax liability on the income chargeable to tax is met by way of advance tax plus TDS/TCS. When the tax liability on the returned income is less than the tax credit the taxpayer is eligible for refund.

Section 244A deals with interest payable on:

(i) refund of tax arising due to excess tax credit;

(ii) claim of refund due to excess deduction of tax at source;

(iii) payments made by way of TCS during the previous year.

This article discusses what is fresh assessment? and how an assessment not being fresh assessment entitles the taxpayer to claim excess interest @ 3 percent under section 244(1A) when there is delay in grant of refund by the income-tax authorities which was discussed brilliantly by the Karnataka High Court in the case of Wipro Ltd v Joint CIT [2021] 130 taxmann.com 84/438 ITR 581 .

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