Can I get section 244A interest on the amounts the department adjusted against my Vivad se Vishwas liability, or refunded to me under the scheme?
No. The Madras High Court held that the Explanation to section 7 of the Direct Tax Vivad se Vishwas Act, 2020 expressly denies a declarant interest under section 244A on the excess amount refunded, and that section 7 is a complete code — if the case is to be settled under the Act, no section 244A interest is available. Two of the four writ petitions were dismissed and the batch disposed of with directions.
Decided by the High Court (C. Saravanan J) on 2024-03-11, reported as Direct Tax Vivad se Vishwas Act, 2020; W.P.Nos.10389, 10393, 10395 and 10600 of 2021 (Madras High Court). It bears on section DTVSV 2020, section 244A, section 245 of the Income Tax Act 1961, in Refunds, Interest & Condonation, Appeals and How Tax Law Is Read matters.
This is the Revenue-side authority on scheme refunds and the one the department will cite whenever a declarant asks for interest. It is a real cost of opting in, and it should be priced before Form 1 is filed: a declarant who has already paid more than the section 3 amount gets the excess back under the Explanation to section 7, but gets no section 244A interest on it, and the Court held the designated authority was right to omit interest from Form 3 for that reason. The judgment also shows where the interest survives — the Court held that amounts refundable for years for which NO declaration was filed carry section 244A interest in the ordinary way, so the exclusion is year-specific and turns on which assessment years are brought into the scheme. Set against ACIT v Satwashil Vasant Mane (Kerala), which awards compensation under the Interest Act 1978 for the department's delay in paying a Form 5 refund; that claim is framed differently and this decision does not address it.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The Italian company filed declarations in Form 1 on 31 January 2021 for ten assessment years from AY 1999-2000 to AY 2008-09. The designated authority acknowledged them and issued Form 3 on 11 March 2021 and other dates, quantifying for AYs 1999-2000 to 2002-03 the amount refundable under s.7. The underlying issue, the benefit of s.44BBB, was still before the Supreme Court in two civil appeals for AY 1999-2000 and AY 2000-01, which were withdrawn on 26 July 2023 in view of the declarations; appeals for other years were before the Tribunal. Orders under s.154 dated 29 January 2021 had ordered refunds after adjusting liability from refunds due for AYs 2004-05 and 2005-06 under s.245, and had also ordered s.244A interest for AYs 1999-2000 to 2002-03. In Form 3 the designated authority did not allow that s.244A interest. The petitioner sought a fresh Form 3 recomputing the refunds with s.244A interest so that the interest could be adjusted against its liability for AYs 2003-04 to 2006-07. It had deposited Rs 15,84,14,906 on 11 November 2021 for AYs 2003-04 to 2006-07 pursuant to an order of the Court.
The writ petitions were disposed of with twelve numbered directions (para 45): W.P.Nos.10389 and 10600 of 2021 disposed of in terms of directions (i) to (iii), and W.P.Nos.10393 and 10395 of 2021 "liable be dismissed and are dismissed" (direction viii); no costs (direction xii). The petitioner was held not entitled to the relief as prayed for in full (para 43). Section 7 of the 2020 Act is a complete code, and if a case is to be settled under it no interest under s.244A is available (para 36). The designated authority was correct to accede to the refunds while declining to order s.244A interest, which accords with the Explanation to s.7 (para 38). Where no declaration was filed for an assessment year, the excess after adjustment is refundable for that year together with s.244A interest in the ordinary way (paras 41 and 43). The amount quantified as payable by the petitioner in Form 1 was not correct and the department's quantification in Form 3 was correct (para 34).
The Court set out the mechanics — declaration in Form 1 under s.4(1) with Rule 3, certificate in Form 3 under s.5(1) with Rule 4, payment within fifteen days, intimation in Form 4 under Rule 5, and the order in Form 5 under Rule 7 and s.5(2) — and said the Act and Rules are unambiguous and brook no interpretation (paras 5 to 7). It extracted s.7 with its Explanation (para 20), under which a declarant who had paid, before filing the declaration, more than the s.3 amount is entitled to a refund of the excess but is not entitled to interest on it under s.244A. Because the petitioner had pending appeals before the Supreme Court and the Tribunal on the taxability issue, the amount payable fell under row (a) of the Table to s.3, being the tax due without penalty and interest (para 33). Since no amount was paid either with Form 1 or after Form 3, the request for a fresh Form 3 carrying s.244A interest on belated adjustment of refunds was not available in view of the Explanation to s.7 (para 37). The Court then separated the years: for AYs 1999-2000 and 2000-01 there had been mere adjustment of amounts out of refunds due for AYs 2004-05 and 2005-06, and the excess after adjustment was refundable with s.244A interest for those later years provided no declarations had been filed for them (paras 40, 41 and 43); for AYs 2001-02 and 2002-03 the excess was refundable under s.7 but without s.244A interest (paras 42 and 44).
If the case is to be settled under it, no interest under Section 244-A of the IT Act, 1961 is available.
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Handle my notice → Ask a CA on WhatsAppNo. The Madras High Court held that the Explanation to section 7 of the Direct Tax Vivad se Vishwas Act, 2020 expressly denies a declarant interest under section 244A on the excess amount refunded, and that section 7 is a complete code — if the case is to be settled under the Act, no section 244A interest is available. Two of the four writ petitions were dismissed and the batch disposed of with directions. This was decided by the High Court (C. Saravanan J) and bears on section DTVSV 2020, section 244A, section 245 of the Income Tax Act 1961. It is reported as Direct Tax Vivad se Vishwas Act, 2020; W.P.Nos.10389, 10393, 10395 and 10600 of 2021 (Madras High Court). This is the Revenue-side authority on scheme refunds and the one the department will cite whenever a declarant asks for interest. It is a real cost of opting in, and it should be priced before Form 1 is filed: a declarant who has already paid more than the section 3 amount gets the excess back under the Explanation to section 7, but gets no section 244A interest on it, and the Court held the designated authority was right to omit interest from Form 3 for that reason. The judgment also shows where the interest survives — the Court held that amounts refundable for years for which NO declaration was filed carry section 244A interest in the ordinary way, so the exclusion is year-specific and turns on which assessment years are brought into the scheme. Set against ACIT v Satwashil Vasant Mane (Kerala), which awards compensation under the Interest Act 1978 for the department's delay in paying a Form 5 refund; that claim is framed differently and this decision does not address it. If it applies to you, the first step is this: Before filing Form 1, compute what has already been paid for the year against the s.3 amount, and treat any excess as recoverable without interest.
The Italian company filed declarations in Form 1 on 31 January 2021 for ten assessment years from AY 1999-2000 to AY 2008-09. The designated authority acknowledged them and issued Form 3 on 11 March 2021 and other dates, quantifying for AYs 1999-2000 to 2002-03 the amount refundable under s.7. The underlying issue, the benefit of s.44BBB, was still before the Supreme Court in two civil appeals for AY 1999-2000 and AY 2000-01, which were withdrawn on 26 July 2023 in view of the declarations; appeals for other years were before the Tribunal. Orders under s.154 dated 29 January 2021 had ordered refunds after adjusting liability from refunds due for AYs 2004-05 and 2005-06 under s.245, and had also ordered s.244A interest for AYs 1999-2000 to 2002-03. In Form 3 the designated authority did not allow that s.244A interest. The petitioner sought a fresh Form 3 recomputing the refunds with s.244A interest so that the interest could be adjusted against its liability for AYs 2003-04 to 2006-07. It had deposited Rs 15,84,14,906 on 11 November 2021 for AYs 2003-04 to 2006-07 pursuant to an order of the Court. The matter was decided on 2024-03-11 by the High Court (C. Saravanan J). On those facts the High Court held as follows. The writ petitions were disposed of with twelve numbered directions (para 45): W.P.Nos.10389 and 10600 of 2021 disposed of in terms of directions (i) to (iii), and W.P.Nos.10393 and 10395 of 2021 "liable be dismissed and are dismissed" (direction viii); no costs (direction xii). The petitioner was held not entitled to the relief as prayed for in full (para 43). Section 7 of the 2020 Act is a complete code, and if a case is to be settled under it no interest under s.244A is available (para 36). The designated authority was correct to accede to the refunds while declining to order s.244A interest, which accords with the Explanation to s.7 (para 38). Where no declaration was filed for an assessment year, the excess after adjustment is refundable for that year together with s.244A interest in the ordinary way (paras 41 and 43). The amount quantified as payable by the petitioner in Form 1 was not correct and the department's quantification in Form 3 was correct (para 34).
The Court set out the mechanics — declaration in Form 1 under s.4(1) with Rule 3, certificate in Form 3 under s.5(1) with Rule 4, payment within fifteen days, intimation in Form 4 under Rule 5, and the order in Form 5 under Rule 7 and s.5(2) — and said the Act and Rules are unambiguous and brook no interpretation (paras 5 to 7). It extracted s.7 with its Explanation (para 20), under which a declarant who had paid, before filing the declaration, more than the s.3 amount is entitled to a refund of the excess but is not entitled to interest on it under s.244A. Because the petitioner had pending appeals before the Supreme Court and the Tribunal on the taxability issue, the amount payable fell under row (a) of the Table to s.3, being the tax due without penalty and interest (para 33). Since no amount was paid either with Form 1 or after Form 3, the request for a fresh Form 3 carrying s.244A interest on belated adjustment of refunds was not available in view of the Explanation to s.7 (para 37). The Court then separated the years: for AYs 1999-2000 and 2000-01 there had been mere adjustment of amounts out of refunds due for AYs 2004-05 and 2005-06, and the excess after adjustment was refundable with s.244A interest for those later years provided no declarations had been filed for them (paras 40, 41 and 43); for AYs 2001-02 and 2002-03 the excess was refundable under s.7 but without s.244A interest (paras 42 and 44). In the words reproduced by the source cited on this page: "If the case is to be settled under it, no interest under Section 244-A of the IT Act, 1961 is available."
It was decided by the High Court on 2024-03-11 and is reported as Direct Tax Vivad se Vishwas Act, 2020; W.P.Nos.10389, 10393, 10395 and 10600 of 2021 (Madras High Court). 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, section 245, 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 cuts both ways and is cited by both sides. The writ petitions were disposed of with twelve numbered directions (para 45): W.P.Nos.10389 and 10600 of 2021 disposed of in terms of directions (i) to (iii), and W.P.Nos.10393 and 10395 of 2021 "liable be dismissed and are dismissed" (direction viii); no costs (direction xii). The petitioner was held not entitled to the relief as prayed for in full (para 43). Section 7 of the 2020 Act is a complete code, and if a case is to be settled under it no interest under s.244A is available (para 36). The designated authority was correct to accede to the refunds while declining to order s.244A interest, which accords with the Explanation to s.7 (para 38). Where no declaration was filed for an assessment year, the excess after adjustment is refundable for that year together with s.244A interest in the ordinary way (paras 41 and 43). The amount quantified as payable by the petitioner in Form 1 was not correct and the department's quantification in Form 3 was correct (para 34). It arises in Refunds, Interest & Condonation, Appeals and How Tax Law Is Read matters, on section DTVSV 2020, section 244A, section 245 of the Income Tax Act 1961, and was decided by C. Saravanan 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. Do not bring into the scheme an assessment year whose refund carries substantial s.244A interest unless the interest forgone is smaller than the settlement benefit — the exclusion bites year by year. Where refunds of one year have been adjusted under s.245 against the settled liability of another, separate the years: interest survives on a year for which no declaration was filed. Do not ask the designated authority for a fresh Form 3 recomputed with s.244A interest; the Court held that relief is not available in view of the Explanation to s.7. If the grievance is the department's DELAY in paying a refund after Form 5, plead it as compensation for delay rather than as s.244A interest, and cite the Kerala and Bombay High Court decisions.
Validity check could not be completed. Validity check could not be completed. No later treatment was searched for or located. The Kerala High Court in ACIT v. Satwashil Vasant Mane (3 March 2025), agreeing with the Bombay High Court in UPS Freight Services India Pvt. Ltd. (28 August 2023), held that s.7 excludes only s.244A interest and does not bar compensation for the department's delay in actually paying a Form 5 refund; neither decision is cited in this judgment and neither addresses the s.244A entitlement in the same terms, so no conflict is asserted here. The label 'high courts differ' has deliberately NOT been used. On a re-check the sentence preceding the quoted words prints identically on both routes — "Section 7 of DTVSV Act, 2020 is a complete code by itself" on the plain document page and on the fragment view — though an earlier fragment query returned "DTVSVA Act, 2020" in that position. The quoted sentence is the following one, which is identical on every route tried. 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.
This report is materially incomplete on the page read. Paragraphs 1, 11, 13, 18, 21, 27, 28, 30 and 31 announce tables, lists of decisions and statutory extracts that the page does not reproduce, so the reliefs sought in each writ petition, the figures in those tables, and the decisions cited by counsel are not known. Para 39 repeats a sentence and refers to "Assessment Year 2004-2003". The judgment ends at para 45 with the words "these writ petitions are disposed with the following directions/orders/observations", followed by twelve numbered directions (i) to (xii), all of which were transcribed on a re-fetch: (i) to (iii) treat the adjusted amounts for AYs 1999-2000 and 2000-01 as paid under the Act, require Form 5 and closure for those years, and direct processing of the s.154 excess with s.244A interest for AYs 2004-05 and 2005-06 subject to s.7; (iv) disposes of W.P.Nos.10389 and 10600 of 2021 in those terms; (v) to (vii) hold the Form 3 quantification correct for AYs 2001-02 and 2002-03, require Form 5 and closure for those years, and deny s.244A interest for them on the Explanation to s.7; (viii) dismisses W.P.Nos.10393 and 10395 of 2021; (ix) requires Form 5 and closure for AYs 2003-04 to 2006-07 on the Rs 15,84,14,906 paid pursuant to the order dated 28 October 2021; (x) and (xi) set three months; (xii) no costs. The date on which that sum was actually paid is not in any paragraph read. The judgment was reserved on 21 August 2023 and pronounced on 11 March 2024. 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 writ petitions were disposed of with twelve numbered directions (para 45): W.P.Nos.10389 and 10600 of 2021 disposed of in terms of directions (i) to (iii), and W.P.Nos.10393 and 10395 of 2021 "liable be dismissed and are dismissed" (direction viii); no costs (direction xii). The petitioner was held not entitled to the relief as prayed for in full (para 43). Section 7 of the 2020 Act is a complete code, and if a case is to be settled under it no interest under s.244A is available (para 36). The designated authority was correct to accede to the refunds while declining to order s.244A interest, which accords with the Explanation to s.7 (para 38). Where no declaration was filed for an assessment year, the excess after adjustment is refundable for that year together with s.244A interest in the ordinary way (paras 41 and 43). The amount quantified as payable by the petitioner in Form 1 was not correct and the department's quantification in Form 3 was correct (para 34).
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