What is Refund on appeal, etc? What is the meaning of Correctness of assessment not to be questioned? What is Interest on delayed refunds? Section 240, 242 and 243 of Income Tax Act 1961

Refund on appeal etc, Correctness of assessment not to be questioned and Interest on delayed refunds are defined under section 240, 242 and 243 of Income Tax Act 1961. Provisions under these Sections are :

Section 240 of Income Tax Act "Refund on appeal, etc"

Section 240. Where, as a result of any order passed in appeal or other 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:

Provided that where, by the order aforesaid,-

(a) 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;

(b) 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 total income returned by the assessee.

Section 242 of Income Tax Act "Correctness of assessment not to be questioned"

Section 242. In a claim under this Chapter, it shall not be open to the assessee to question the correctness of any assessment or other matter decided which has become final and conclusive or ask for a review of the same, and the assessee shall not be entitled to any relief on such claim except refund of tax wrongly paid or paid in excess.


Section 243 of Income Tax Act "Interest on delayed refunds"

Section 243. (1) If the Assessing Officer does not grant the refund,-

(a) in any case where the total income of the assessee does not consist solely of income from interest on securities or dividends, within three months from the end of the month in which the total income is determined under this Act, and

(b) in any other case, within three months from the end of the month in which the claim for refund is made under this Chapter, the Central Government shall pay the assessee simple interest at fifteen per cent per annum on the amount directed to be refunded from the date immediately following the expiry of the period of three months aforesaid to the date of the order granting the refund.

Explanation.-If the delay in granting the refund within the period of three months aforesaid is attributable to the assessee, whether wholly or in part, the period of the delay attributable to him shall be excluded from the period for which interest is payable.

(2) Where any question arises as to the period to be excluded for the purposes of calculation of interest under the provisions of this section, such question shall be determined by the 82[Principal Chief Commissioner or] Chief Commissioner or Principal Commissioner or Commissioner whose decision shall be final.

(3) The provisions of this section shall not apply in respect of any assessment for the assessment year commencing on the 1st day of April, 1989 or any subsequent assessment years

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