Form 5 was issued and a refund became due to me, but the department sat on it for two years and now refuses interest, citing section 7 of the 2020 Act. Can I get interest?
Yes. The Kerala High Court held there is no absolute prohibition in the Direct Tax Vivad se Vishwas Act, 2020 on a declarant claiming interest; what section 7 excludes is interest under section 244A of the Income-tax Act on the excess pre-declaration payment. Because section 5(2) obliges the declarant to pay within fifteen days, the department is equally bound to refund the excess within a reasonable time, and where the delay is solely the Revenue's fault the Court can award reasonable interest under section 3 of the Interest Act, 1978. The Revenue's writ appeal was dismissed.
Decided by the High Court (Dr A.K. Jayasankaran Nambiar J and Easwaran S. J (judgment per Easwaran S. J)) on 2025-03-03, reported as Direct Tax Vivad se Vishwas Act, 2020; W.A. No. 369 of 2025 (Kerala High Court), 2025:KER:18864, against the judgment dated 7 January 2025 in W.P.(C) No.21868 of 2024. It bears on section DTVSV 2020, section 244A of the Income Tax Act 1961, in Refunds, Interest & Condonation and Appeals matters.
Section 7 is the provision the department reaches for whenever a Form 5 refund is delayed, and read literally its Explanation does deny section 244A interest. This decision separates two questions that the department runs together: whether section 244A applies, and whether the Court can compensate a declarant for the Revenue's own delay in paying money it had no right to keep. On the second the Court agreed with the Bombay High Court in UPS Freight Services India Pvt. Ltd., that the State having received and used the money without right must make the party good. The symmetry argument is the useful part — the fifteen-day obligation on the declarant is read across as a reasonable-time obligation on the department. Read this alongside Ansaldo Energia (Madras), which holds section 7 to be a complete code and denies section 244A interest outright; the two are arguably reconcilable, because Ansaldo concerns the section 244A entitlement itself while this case concerns compensation for departmental delay after Form 5, but a practitioner should expect the department to cite Ansaldo against this.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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By an assessment order under s.143(3) for AY 2016-17 the assessee's total income was assessed at Rs 1,86,80,000, including an addition of Rs 75,00,000 as unexplained investment. He filed a declaration and undertaking under s.4(5) of the 2020 Act. A certificate drawn by the Assistant Commissioner showed him entitled to a refund of Rs 28,81,185, and the Principal Commissioner issued Form 5 under s.5(2) on 24 November 2021. The fifteen-day period from that order expired on 8 December 2021, but the Assistant Commissioner passed the order giving effect to the refund only on 29 November 2023, denying interest. A grievance petition of 8 January 2024 was answered by saying that any amount paid in pursuance of a declaration under s.4 is not refundable in any circumstances. The Single Judge directed interest; the Revenue appealed, arguing that the 2020 Act is a special enactment to be strictly construed and that s.7 specifically excludes s.244A.
The Revenue's writ appeal was dismissed and the Single Judge's findings upheld, with no order as to costs (para 12). There is no absolute prohibition in the 2020 Act disentitling a declarant from claiming interest; what s.7 provides is the exclusion of interest under s.244A of the Income-tax Act (para 9). Since s.5(2) obliges the declarant to pay within fifteen days of the certificate, the department is equally bound in law, though not expressly so provided, to refund the excess within a reasonable time (para 10). The power to grant interest is always available to the Court under s.3 of the Interest Act, 1978, notwithstanding the Income-tax Act and the 2020 Act, where the delay is solely due to the Revenue's fault (para 11).
The Court set out s.244A (para 7), then s.5 and s.7 of the 2020 Act (paras 8 and 9). Reading s.7 and its Explanation, it held that the provision speaks to the refund of amounts paid in pursuance of a declaration and to the exclusion of s.244A interest on a pre-declaration excess payment, and that the Revenue's wider contention — that acceptance of a declaration leaves the assessee with a refund but no interest of any kind — was far-fetched, no absolute prohibition being found (para 9). It fixed the fault on the facts: the certificate was issued on 24 November 2021, the fifteen-day period expired on 8 December 2021, and the officer unreasonably sat over the matter until 29 November 2023 (para 10). It then located the power to award interest in s.3 of the Interest Act, 1978, fortified by s.4 of that Act (para 11), and expressed respectful agreement with the Bombay High Court in UPS Freight Services India Pvt. Ltd., which had held on similar facts that the State, having received the money without right and having retained and used it, must make the party good just as an individual would (para 12).
we could not find any absolute prohibition under the Act disentitling the assessee from claiming interest. What is provided under Section 7 is exclusion of interest as provided under Section 244A of the Income Tax Act, 1961.
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Handle my notice → Ask a CA on WhatsAppYes. The Kerala High Court held there is no absolute prohibition in the Direct Tax Vivad se Vishwas Act, 2020 on a declarant claiming interest; what section 7 excludes is interest under section 244A of the Income-tax Act on the excess pre-declaration payment. Because section 5(2) obliges the declarant to pay within fifteen days, the department is equally bound to refund the excess within a reasonable time, and where the delay is solely the Revenue's fault the Court can award reasonable interest under section 3 of the Interest Act, 1978. The Revenue's writ appeal was dismissed. This was decided by the High Court (Dr A.K. Jayasankaran Nambiar J and Easwaran S. J (judgment per Easwaran S. J)) and bears on section DTVSV 2020, section 244A of the Income Tax Act 1961. It is reported as Direct Tax Vivad se Vishwas Act, 2020; W.A. No. 369 of 2025 (Kerala High Court), 2025:KER:18864, against the judgment dated 7 January 2025 in W.P.(C) No.21868 of 2024. Section 7 is the provision the department reaches for whenever a Form 5 refund is delayed, and read literally its Explanation does deny section 244A interest. This decision separates two questions that the department runs together: whether section 244A applies, and whether the Court can compensate a declarant for the Revenue's own delay in paying money it had no right to keep. On the second the Court agreed with the Bombay High Court in UPS Freight Services India Pvt. Ltd., that the State having received and used the money without right must make the party good. The symmetry argument is the useful part — the fifteen-day obligation on the declarant is read across as a reasonable-time obligation on the department. Read this alongside Ansaldo Energia (Madras), which holds section 7 to be a complete code and denies section 244A interest outright; the two are arguably reconcilable, because Ansaldo concerns the section 244A entitlement itself while this case concerns compensation for departmental delay after Form 5, but a practitioner should expect the department to cite Ansaldo against this. If it applies to you, the first step is this: Date the two events precisely: the s.5(1) certificate or Form 5, and the date the refund was actually paid; the gap is the whole case.
By an assessment order under s.143(3) for AY 2016-17 the assessee's total income was assessed at Rs 1,86,80,000, including an addition of Rs 75,00,000 as unexplained investment. He filed a declaration and undertaking under s.4(5) of the 2020 Act. A certificate drawn by the Assistant Commissioner showed him entitled to a refund of Rs 28,81,185, and the Principal Commissioner issued Form 5 under s.5(2) on 24 November 2021. The fifteen-day period from that order expired on 8 December 2021, but the Assistant Commissioner passed the order giving effect to the refund only on 29 November 2023, denying interest. A grievance petition of 8 January 2024 was answered by saying that any amount paid in pursuance of a declaration under s.4 is not refundable in any circumstances. The Single Judge directed interest; the Revenue appealed, arguing that the 2020 Act is a special enactment to be strictly construed and that s.7 specifically excludes s.244A. The matter was decided on 2025-03-03 by the High Court (Dr A.K. Jayasankaran Nambiar J and Easwaran S. J (judgment per Easwaran S. J)). On those facts the High Court held as follows. The Revenue's writ appeal was dismissed and the Single Judge's findings upheld, with no order as to costs (para 12). There is no absolute prohibition in the 2020 Act disentitling a declarant from claiming interest; what s.7 provides is the exclusion of interest under s.244A of the Income-tax Act (para 9). Since s.5(2) obliges the declarant to pay within fifteen days of the certificate, the department is equally bound in law, though not expressly so provided, to refund the excess within a reasonable time (para 10). The power to grant interest is always available to the Court under s.3 of the Interest Act, 1978, notwithstanding the Income-tax Act and the 2020 Act, where the delay is solely due to the Revenue's fault (para 11).
The Court set out s.244A (para 7), then s.5 and s.7 of the 2020 Act (paras 8 and 9). Reading s.7 and its Explanation, it held that the provision speaks to the refund of amounts paid in pursuance of a declaration and to the exclusion of s.244A interest on a pre-declaration excess payment, and that the Revenue's wider contention — that acceptance of a declaration leaves the assessee with a refund but no interest of any kind — was far-fetched, no absolute prohibition being found (para 9). It fixed the fault on the facts: the certificate was issued on 24 November 2021, the fifteen-day period expired on 8 December 2021, and the officer unreasonably sat over the matter until 29 November 2023 (para 10). It then located the power to award interest in s.3 of the Interest Act, 1978, fortified by s.4 of that Act (para 11), and expressed respectful agreement with the Bombay High Court in UPS Freight Services India Pvt. Ltd., which had held on similar facts that the State, having received the money without right and having retained and used it, must make the party good just as an individual would (para 12). In the words reproduced by the source cited on this page: "we could not find any absolute prohibition under the Act disentitling the assessee from claiming interest. What is provided under Section 7 is exclusion of interest as provided under Section 244A of the Income Tax Act, 1961." The decision followed or applied UPS Freight Services India Pvt. Ltd. v. Deputy Commissioner of Income Tax, Central Circle 3-2, Writ Petition (Civil) No.10314/2023 (Bombay), decided 28 August 2023, [2023 SCC OnLine Bom 2960] — respectfully agreed with.
It was decided by the High Court on 2025-03-03 and is reported as Direct Tax Vivad se Vishwas Act, 2020; W.A. No. 369 of 2025 (Kerala High Court), 2025:KER:18864, against the judgment dated 7 January 2025 in W.P.(C) No.21868 of 2024. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section DTVSV 2020, section 244A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's writ appeal was dismissed and the Single Judge's findings upheld, with no order as to costs (para 12). There is no absolute prohibition in the 2020 Act disentitling a declarant from claiming interest; what s.7 provides is the exclusion of interest under s.244A of the Income-tax Act (para 9). Since s.5(2) obliges the declarant to pay within fifteen days of the certificate, the department is equally bound in law, though not expressly so provided, to refund the excess within a reasonable time (para 10). The power to grant interest is always available to the Court under s.3 of the Interest Act, 1978, notwithstanding the Income-tax Act and the 2020 Act, where the delay is solely due to the Revenue's fault (para 11). It arises in Refunds, Interest & Condonation and Appeals matters, on section DTVSV 2020, section 244A of the Income Tax Act 1961, and was decided by Dr A.K. Jayasankaran Nambiar J and Easwaran S. J (judgment per Easwaran S. J). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Plead the claim as compensation for the Revenue's delay under s.3 of the Interest Act, 1978, not as a claim to s.244A interest, which s.7 excludes in terms. Run the symmetry point — the declarant must pay within fifteen days under s.5(2), so the department must refund within a reasonable time. Cite UPS Freight Services India Pvt. Ltd. v. DCIT, Central Circle 3-2 (Bombay), Writ Petition No.10314/2023 decided 28 August 2023, which this Court expressly agreed with. File the grievance petition first and annex the department's answer; the refusal here was that any amount paid under s.4 is not refundable in any circumstances, which the Court found untenable on the Explanation to s.7.
Validity check could not be completed. Validity check could not be completed. No later treatment was searched for or located and it is not known whether the Revenue has taken the matter further. It sits in tension with the Madras High Court in Ansaldo Energia SPA v. DCIT, decided 11 March 2024 and read this pass, which holds that s.7 of the 2020 Act is a complete code and that no s.244A interest is available to a declarant. The two may be reconcilable, because this judgment awards compensation for departmental delay under the Interest Act 1978 rather than interest under s.244A, but the point has not been tested and the label 'high courts differ' has deliberately NOT been used because the conflict has not been shown to be squarely on the same question. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
In the copy read, s.244A is reproduced with sub-section (1A) printed after sub-section (4), out of sequence; that is a printing artefact in the report and not a statement about the section's structure. The judgment runs to para 12 with no separate disposal paragraph — the dismissal is in the last sentence of para 12. The learned Single Judge's judgment of 7 January 2025 in WP(C) No.21868 of 2024 was not read; its reasoning is known only from paras 3 and 12 of this judgment. Neutral citation 2025:KER:18864 as printed. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's writ appeal was dismissed and the Single Judge's findings upheld, with no order as to costs (para 12). There is no absolute prohibition in the 2020 Act disentitling a declarant from claiming interest; what s.7 provides is the exclusion of interest under s.244A of the Income-tax Act (para 9). Since s.5(2) obliges the declarant to pay within fifteen days of the certificate, the department is equally bound in law, though not expressly so provided, to refund the excess within a reasonable time (para 10). The power to grant interest is always available to the Court under s.3 of the Interest Act, 1978, notwithstanding the Income-tax Act and the 2020 Act, where the delay is solely due to the Revenue's fault (para 11).
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