The Tribunal decided my appeal years ago and the Assessing Officer still has not passed the order giving effect. What do I get besides the refund?
You get the refund on the footing that your returned income has become final, plus additional interest under s.244A(1A) at three per cent per annum. The Karnataka High Court held that where the order giving effect is not passed within the three months allowed by s.153(5), the Assessing Officer becomes functus officio, the returned income stands, any tax collected above the tax on the returned income must be refunded, and the additional interest runs from the expiry of the s.153(5) period to the date the refund is granted.
Decided by the High Court (S.R. Krishna Kumar J) on 2025-11-07, reported as Writ Petition No. 29023 of 2024 (T-IT) (Karnataka High Court); Neutral Citation 2025:KHC:45470. It bears on section 244A, section 244A(1A), section 153(5), section 254 of the Income Tax Act 1961, in Refunds, Interest & Condonation, Appeals and Assessment & Scrutiny matters.
Section 244A(1A) is routinely ignored in refund computations, and the ordinary departmental answer to an unexecuted appellate order is that the assessee must keep filing reminders. This decision supplies two things at once: a consequence for the Revenue's inaction that goes to the merits (the returned income becomes final), and a fixed starting point for the extra three per cent. The starting point matters — it is the expiry of the s.153(5) limit, not the date of the Tribunal order and not the date of any belated order giving effect, so an assessee who has waited years gets the additional interest for the whole of that wait. The obvious limit is that this is the Karnataka line; the proposition that the returned income becomes final on the lapse of s.153(5) is a strong one and should not be assumed to hold in every High Court. The interest limb is the safer of the two propositions to run elsewhere.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner sought refunds for assessment years 2006-07, 2007-08 and 2008-09 of Rs 3,78,59,031, Rs 45,53,45,565 and Rs 4,56,99,570 respectively, approximately Rs 53.89 crore in all. Its case was that the income tax authorities had failed to pass the orders giving effect to the appellate directions within the time allowed by s.153(5), which requires the Assessing Officer to pass an order giving effect within three months from the end of the month in which the order under s.254 is received. The petitioner relied on the Court's earlier decision in Biesse India Pvt. Ltd. (Writ Petition No. 16223 of 2023, decided 5 February 2024), where the Tribunal's order of 7 July 2017 had been given effect only on 23 August 2023 and that order giving effect was held to be time-barred; that decision had been confirmed by a Division Bench in Writ Appeal No. 1619 of 2024 on 5 August 2025. The petitioner claimed both the refund and additional interest under s.244A(1A).
The writ petition was allowed. The Assessing Officer having failed to pass the order giving effect within the prescribed time, the returned income becomes final and any tax recovered beyond the tax on the returned income must be refunded. The additional interest under s.244A(1A) is to be computed from the expiry of the time limit provided under s.153(5) until the date of grant of the refund. The respondents were directed to grant the refunds of Rs 3,78,59,031 for AY 2006-07, Rs 45,53,45,565 for AY 2007-08 and Rs 4,56,99,570 for AY 2008-09 together with applicable interest within three months of receipt of a copy of the order.
The Court treated s.153(5) as a mandatory time limit and not a directory one: the Assessing Officer is to pass the order giving effect within three months from the end of the month in which the s.254 order is received, and on the expiry of that period he becomes functus officio and loses jurisdiction to pass it. The consequence, which the Court drew from its own earlier decision in Biesse India as affirmed by the Division Bench, is that the assessment cannot be completed at all, so the returned income becomes final and every rupee collected in excess of the tax on the returned income has to be refunded. Having reached that point on the refund, the Court turned to interest and held that the entitlement is not limited to s.244A(1): the assessee is entitled to interest under s.244A(1A) as well, and that additional interest runs from the expiry of the s.153(5) period until the refund is granted. The Court supported the mandatory reading of the limitation provision with the line of authority on statutory time limits in fiscal statutes, including S.S. Gadgil v. Lal & Co., National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India and CCE & Customs v. Hongo India (P) Ltd., and on the refund consequence with CIT v. Shelly Products and Hope Textiles Ltd. v. Union of India.
Thus, it is clear that the additional interest under Section 244A(1A) shall be computed from the expiry of time limit provided under Section 153(5) till the date of grant of refund
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Handle my notice → Ask a CA on WhatsAppYou get the refund on the footing that your returned income has become final, plus additional interest under s.244A(1A) at three per cent per annum. The Karnataka High Court held that where the order giving effect is not passed within the three months allowed by s.153(5), the Assessing Officer becomes functus officio, the returned income stands, any tax collected above the tax on the returned income must be refunded, and the additional interest runs from the expiry of the s.153(5) period to the date the refund is granted. This was decided by the High Court (S.R. Krishna Kumar J) and bears on section 244A, section 244A(1A), section 153(5), section 254 of the Income Tax Act 1961. It is reported as Writ Petition No. 29023 of 2024 (T-IT) (Karnataka High Court); Neutral Citation 2025:KHC:45470. Section 244A(1A) is routinely ignored in refund computations, and the ordinary departmental answer to an unexecuted appellate order is that the assessee must keep filing reminders. This decision supplies two things at once: a consequence for the Revenue's inaction that goes to the merits (the returned income becomes final), and a fixed starting point for the extra three per cent. The starting point matters — it is the expiry of the s.153(5) limit, not the date of the Tribunal order and not the date of any belated order giving effect, so an assessee who has waited years gets the additional interest for the whole of that wait. The obvious limit is that this is the Karnataka line; the proposition that the returned income becomes final on the lapse of s.153(5) is a strong one and should not be assumed to hold in every High Court. The interest limb is the safer of the two propositions to run elsewhere. If it applies to you, the first step is this: Date the appellate order and the month in which the Assessing Officer received it, then count three months from the end of that month; that is the s.153(5) deadline and the date from which the three per cent additional interest starts.
The petitioner sought refunds for assessment years 2006-07, 2007-08 and 2008-09 of Rs 3,78,59,031, Rs 45,53,45,565 and Rs 4,56,99,570 respectively, approximately Rs 53.89 crore in all. Its case was that the income tax authorities had failed to pass the orders giving effect to the appellate directions within the time allowed by s.153(5), which requires the Assessing Officer to pass an order giving effect within three months from the end of the month in which the order under s.254 is received. The petitioner relied on the Court's earlier decision in Biesse India Pvt. Ltd. (Writ Petition No. 16223 of 2023, decided 5 February 2024), where the Tribunal's order of 7 July 2017 had been given effect only on 23 August 2023 and that order giving effect was held to be time-barred; that decision had been confirmed by a Division Bench in Writ Appeal No. 1619 of 2024 on 5 August 2025. The petitioner claimed both the refund and additional interest under s.244A(1A). The matter was decided on 2025-11-07 by the High Court (S.R. Krishna Kumar J). On those facts the High Court held as follows. The writ petition was allowed. The Assessing Officer having failed to pass the order giving effect within the prescribed time, the returned income becomes final and any tax recovered beyond the tax on the returned income must be refunded. The additional interest under s.244A(1A) is to be computed from the expiry of the time limit provided under s.153(5) until the date of grant of the refund. The respondents were directed to grant the refunds of Rs 3,78,59,031 for AY 2006-07, Rs 45,53,45,565 for AY 2007-08 and Rs 4,56,99,570 for AY 2008-09 together with applicable interest within three months of receipt of a copy of the order.
The Court treated s.153(5) as a mandatory time limit and not a directory one: the Assessing Officer is to pass the order giving effect within three months from the end of the month in which the s.254 order is received, and on the expiry of that period he becomes functus officio and loses jurisdiction to pass it. The consequence, which the Court drew from its own earlier decision in Biesse India as affirmed by the Division Bench, is that the assessment cannot be completed at all, so the returned income becomes final and every rupee collected in excess of the tax on the returned income has to be refunded. Having reached that point on the refund, the Court turned to interest and held that the entitlement is not limited to s.244A(1): the assessee is entitled to interest under s.244A(1A) as well, and that additional interest runs from the expiry of the s.153(5) period until the refund is granted. The Court supported the mandatory reading of the limitation provision with the line of authority on statutory time limits in fiscal statutes, including S.S. Gadgil v. Lal & Co., National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India and CCE & Customs v. Hongo India (P) Ltd., and on the refund consequence with CIT v. Shelly Products and Hope Textiles Ltd. v. Union of India. In the words reproduced by the source cited on this page: "Thus, it is clear that the additional interest under Section 244A(1A) shall be computed from the expiry of time limit provided under Section 153(5) till the date of grant of refund" The decision followed or applied M/s. Biesse India Pvt. Ltd. v. Deputy Commissioner of Income Tax, Writ Petition No. 16223 of 2023, decided 5 February 2024 (Karnataka) — followed; Deputy Commissioner of Income Tax v. M/s. Biesse India Pvt. Ltd., Writ Appeal No. 1619 of 2024, decided 5 August 2025 (Karnataka, Division Bench) — relied on as affirming the above; CIT v. Shelly Products, (2003) 261 ITR 367 (SC) — applied; Hope Textiles Ltd. v. Union of India, [1994] 205 ITR 508 (SC) — applied; S.S. Gadgil v. Lal & Co., [1964] 53 ITR 231 (SC) — applied on mandatory statutory time limits; Wipro Ltd. v. JCIT, (2021) 438 ITR 581 (Karnataka) — relied on.
It was decided by the High Court on 2025-11-07 and is reported as Writ Petition No. 29023 of 2024 (T-IT) (Karnataka High Court); Neutral Citation 2025:KHC:45470. 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 244A, section 244A(1A), section 153(5), section 254, 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 writ petition was allowed. The Assessing Officer having failed to pass the order giving effect within the prescribed time, the returned income becomes final and any tax recovered beyond the tax on the returned income must be refunded. The additional interest under s.244A(1A) is to be computed from the expiry of the time limit provided under s.153(5) until the date of grant of the refund. The respondents were directed to grant the refunds of Rs 3,78,59,031 for AY 2006-07, Rs 45,53,45,565 for AY 2007-08 and Rs 4,56,99,570 for AY 2008-09 together with applicable interest within three months of receipt of a copy of the order. It arises in Refunds, Interest & Condonation, Appeals and Assessment & Scrutiny matters, on section 244A, section 244A(1A), section 153(5), section 254 of the Income Tax Act 1961, and was decided by S.R. Krishna Kumar 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. If no order giving effect was passed within that period, ask in terms for a refund computed on the returned income, not merely for execution of the appellate order. Claim s.244A(1A) as a separate head in the petition, distinctly from ordinary s.244A(1) interest, and set out the computation from the s.153(5) expiry date to the date of grant. Where the department passes a belated order giving effect, do not let it become the starting point of the interest; the Court fixed the start at the expiry of the statutory period, not at the belated order. Check the assessment year first: s.244A(1A) was inserted by the Finance Act 2016 with effect from 1 June 2016, so for an appeal effect due before that date there is no additional interest to claim.
Searched for later treatment; none was found. That is not the same as a source affirming it. Two searches, nothing found. The citedby search on the doc id is empty. A search combining the party name with '244A' returns three results, of which two are Bangalore Tribunal orders of 2016 and 2023 citing an unrelated earlier Honeywell transfer-pricing order, and the third is this judgment. No later decision has adopted, doubted or distinguished the holding that where the order giving effect is not passed within the three months allowed by s.153(5) the assessee is entitled to additional interest under s.244A(1A) at three per cent. No appeal or special leave petition against it was traced. 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.
Read from the indiankanoon print text. The retrieved text does not give, for these three assessment years, the dates of the Tribunal orders or of any order giving effect; those dates are recorded in the judgment only for the precedent case Biesse India (ITAT order 7 July 2017, order giving effect 23 August 2023, held time-barred). Because the judgment concerns AYs 2006-07 to 2008-09, and s.244A(1A) applies only from 1 June 2016, the additional interest here can only relate to appeal effects falling due after that date; the judgment as retrieved does not spell that out and a reader should verify the dates before relying on the interest computation for an old year. Paragraph numbers 10 and 21 are as reported by targeted exact-phrase retrieval. The judgment lists a very large number of authorities; only those bearing on the two propositions relied on are listed below. Several are cited in the judgment by Taxmann reference numbers, reproduced as printed; no Taxmann material was consulted. 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 petition was allowed. The Assessing Officer having failed to pass the order giving effect within the prescribed time, the returned income becomes final and any tax recovered beyond the tax on the returned income must be refunded. The additional interest under s.244A(1A) is to be computed from the expiry of the time limit provided under s.153(5) until the date of grant of the refund. The respondents were directed to grant the refunds of Rs 3,78,59,031 for AY 2006-07, Rs 45,53,45,565 for AY 2007-08 and Rs 4,56,99,570 for AY 2008-09 together with applicable interest within three months of receipt of a copy of the order.
TaxSphere, “Honeywell Technology Solutions Lab P Ltd v DCIT”, https://taxnotice.vittsphere.com/caselaw/case/honeywell-technology-solutions-244a-1a-additional-interest-oge/ (validity last checked 2026-09-07)
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