The department paid my refund but not the s.244A interest. Can I get interest on what is still unpaid?
Yes. Once the accrued s.244A interest has become part of the sum refundable, withholding part of that sum is simply non-payment, and interest on the unpaid amount arises because of it — not as interest on interest. The department was directed to refund the entire amount due together with s.244A interest.
Decided by the High Court (Bombay High Court (K.R. Shriram and Neela Kedar Gokhale, JJ.)) on 2023-08-29, reported as [2025] 173 taxmann.com 12 (Bom); (2023) 335 CTR 983 / (2024) 462 ITR 86 (Bom); Writ Petition No. 3890 of 2021 with IT Appeal No. 650 of 2019. SLP dismissed: Dy. CIT v. Tata Communications Ltd. [2025] 173 taxmann.com 13 / [2025] 304 Taxman 664 (SC), SLP (Civil) Diary No. 8207 of 2025, 6 March 2025.. It bears on section 244A, section 240 of the Income Tax Act 1961, in Refunds, Interest & Condonation matters.
This is the route past the department's stock answer that any such claim is compounding and barred. The move is to treat tax and accrued statutory interest as one amount owed, so that a short payment is a shortfall rather than a second layer of interest. The Revenue's SLP was dismissed, so the department cannot say the point is open, although the dismissal was on a 444-day delay as well as on merits.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The Tribunal had already decided that interest was payable to the assessee under s.244A and had directed the Assessing Officer to compute it on the principles laid down by the Delhi High Court in India Trade Promotion Organisation v. CIT. The Assessing Officer instead dissected that decision and concluded on 15 November 2018 that no further s.244A interest was payable. On 24 June 2019, in Writ Petition No. 1033 of 2019, the Bombay High Court set that order aside and directed him to compute the interest as the Tribunal had said. The same officer then passed a second order on 26 August 2019 again holding that no further interest was payable. The present writ petition, filed in 2021, challenged that second order. A companion appeal, IT Appeal No. 650 of 2019, had also been filed by the Revenue. The judgment does not set out the assessment years or the amounts.
This is not a decision that lays down the interest-on-interest principle; it is a decision enforcing one already laid down. The Court quashed and set aside the Assessing Officer's order of 26 August 2019, holding it had not been passed by applying the principles laid down by the Delhi High Court in India Trade Promotion Organisation v. CIT, and remanded the matter to an Assessing Officer to compute the s.244A interest by strictly applying those principles as the Tribunal and the High Court had already directed, the exercise to be completed by 6 October 2023 (para 2). It further directed the Principal Commissioner to assign the matter to an officer other than the one who had twice flouted the directions of the Tribunal and of the Court, and recorded that it was declining, this once, to take action against him. The writ petition was disposed of (para 4). The companion IT Appeal No. 650 of 2019 was dismissed as withdrawn, the Revenue accepting that it should have been filed as a writ petition, with liberty to file one within three weeks (paras 5-6).
The route is short. The Assessing Officer's role, once the Tribunal had decided the question of interest, was limited to giving effect to the Tribunal's directions; it was not open to him to dissect the ratio of the decision the Tribunal had told him to apply and to conclude that no further interest was payable. That had already been said by the Court on 24 June 2019, and paras 7, 8 and 10 of that judgment are set out in para 1 of this one. Measuring the order of 26 August 2019 against those directions, the Court was satisfied it had again not applied them, and set it aside. The substantive proposition on which the computation rests - that where the Revenue refunds the tax but withholds the s.244A interest that had accrued and become payable, interest runs on the shortfall, which is not compounding because the accrued interest has been capitalised into the amount due - is not this Court's own formulation. It is the Delhi High Court's reasoning in India Trade Promotion Organisation, built on the Supreme Court in CIT v. H.E.G. Ltd., and it is reproduced in para 2 of this judgment as the principle the Assessing Officer must apply on remand.
The matter is remanded to an Assessing Officer, who shall compute interest payable to petitioner under Section 244A of the Income Tax Act, 1961 by strictly applying the principles laid down in India Trade Promotion Organisation (supra) as directed by ITAT and by this Court.
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Handle my notice → Ask a CA on WhatsAppYes. Once the accrued s.244A interest has become part of the sum refundable, withholding part of that sum is simply non-payment, and interest on the unpaid amount arises because of it — not as interest on interest. The department was directed to refund the entire amount due together with s.244A interest. This was decided by the High Court (Bombay High Court (K.R. Shriram and Neela Kedar Gokhale, JJ.)) and bears on section 244A, section 240 of the Income Tax Act 1961. It is reported as [2025] 173 taxmann.com 12 (Bom); (2023) 335 CTR 983 / (2024) 462 ITR 86 (Bom); Writ Petition No. 3890 of 2021 with IT Appeal No. 650 of 2019. SLP dismissed: Dy. CIT v. Tata Communications Ltd. [2025] 173 taxmann.com 13 / [2025] 304 Taxman 664 (SC), SLP (Civil) Diary No. 8207 of 2025, 6 March 2025.. This is the route past the department's stock answer that any such claim is compounding and barred. The move is to treat tax and accrued statutory interest as one amount owed, so that a short payment is a shortfall rather than a second layer of interest. The Revenue's SLP was dismissed, so the department cannot say the point is open, although the dismissal was on a 444-day delay as well as on merits. If it applies to you, the first step is this: Set out the whole refundable figure — tax plus the s.244A interest already accrued — as a single amount due, and show separately what was actually credited against it.
The Tribunal had already decided that interest was payable to the assessee under s.244A and had directed the Assessing Officer to compute it on the principles laid down by the Delhi High Court in India Trade Promotion Organisation v. CIT. The Assessing Officer instead dissected that decision and concluded on 15 November 2018 that no further s.244A interest was payable. On 24 June 2019, in Writ Petition No. 1033 of 2019, the Bombay High Court set that order aside and directed him to compute the interest as the Tribunal had said. The same officer then passed a second order on 26 August 2019 again holding that no further interest was payable. The present writ petition, filed in 2021, challenged that second order. A companion appeal, IT Appeal No. 650 of 2019, had also been filed by the Revenue. The judgment does not set out the assessment years or the amounts. The matter was decided on 2023-08-29 by the High Court (Bombay High Court (K.R. Shriram and Neela Kedar Gokhale, JJ.)). On those facts the High Court held as follows. This is not a decision that lays down the interest-on-interest principle; it is a decision enforcing one already laid down. The Court quashed and set aside the Assessing Officer's order of 26 August 2019, holding it had not been passed by applying the principles laid down by the Delhi High Court in India Trade Promotion Organisation v. CIT, and remanded the matter to an Assessing Officer to compute the s.244A interest by strictly applying those principles as the Tribunal and the High Court had already directed, the exercise to be completed by 6 October 2023 (para 2). It further directed the Principal Commissioner to assign the matter to an officer other than the one who had twice flouted the directions of the Tribunal and of the Court, and recorded that it was declining, this once, to take action against him. The writ petition was disposed of (para 4). The companion IT Appeal No. 650 of 2019 was dismissed as withdrawn, the Revenue accepting that it should have been filed as a writ petition, with liberty to file one within three weeks (paras 5-6).
The route is short. The Assessing Officer's role, once the Tribunal had decided the question of interest, was limited to giving effect to the Tribunal's directions; it was not open to him to dissect the ratio of the decision the Tribunal had told him to apply and to conclude that no further interest was payable. That had already been said by the Court on 24 June 2019, and paras 7, 8 and 10 of that judgment are set out in para 1 of this one. Measuring the order of 26 August 2019 against those directions, the Court was satisfied it had again not applied them, and set it aside. The substantive proposition on which the computation rests - that where the Revenue refunds the tax but withholds the s.244A interest that had accrued and become payable, interest runs on the shortfall, which is not compounding because the accrued interest has been capitalised into the amount due - is not this Court's own formulation. It is the Delhi High Court's reasoning in India Trade Promotion Organisation, built on the Supreme Court in CIT v. H.E.G. Ltd., and it is reproduced in para 2 of this judgment as the principle the Assessing Officer must apply on remand. In the words reproduced by the source cited on this page: "The matter is remanded to an Assessing Officer, who shall compute interest payable to petitioner under Section 244A of the Income Tax Act, 1961 by strictly applying the principles laid down in India Trade Promotion Organisation (supra) as directed by ITAT and by this Court." The decision followed or applied India Trade Promotion Organisation v. CIT [2013] 38 taxmann.com 233 / [2014] 361 ITR 646 (Delhi) - followed (para 2); Tata Communications Ltd. v. Dy. CIT [2019] 108 taxmann.com 200 / 265 Taxman 461 / 415 ITR 344 (Bombay), Writ Petition No. 1033 of 2019, 24 June 2019 - the earlier order in the same matter, extracted at para 1; Followed later in Capgemini Technology Services India Ltd v. Director of Income-tax [2025] 181 taxmann.com 768 (Bombay), Writ Petition No. 9876 of 2025, 9 December 2025 (B.P. Colabawalla and Amit S. Jamsandekar, JJ.).
It was decided by the High Court on 2023-08-29 and is reported as [2025] 173 taxmann.com 12 (Bom); (2023) 335 CTR 983 / (2024) 462 ITR 86 (Bom); Writ Petition No. 3890 of 2021 with IT Appeal No. 650 of 2019. SLP dismissed: Dy. CIT v. Tata Communications Ltd. [2025] 173 taxmann.com 13 / [2025] 304 Taxman 664 (SC), SLP (Civil) Diary No. 8207 of 2025, 6 March 2025.. 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 240, 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. This is not a decision that lays down the interest-on-interest principle; it is a decision enforcing one already laid down. The Court quashed and set aside the Assessing Officer's order of 26 August 2019, holding it had not been passed by applying the principles laid down by the Delhi High Court in India Trade Promotion Organisation v. CIT, and remanded the matter to an Assessing Officer to compute the s.244A interest by strictly applying those principles as the Tribunal and the High Court had already directed, the exercise to be completed by 6 October 2023 (para 2). It further directed the Principal Commissioner to assign the matter to an officer other than the one who had twice flouted the directions of the Tribunal and of the Court, and recorded that it was declining, this once, to take action against him. The writ petition was disposed of (para 4). The companion IT Appeal No. 650 of 2019 was dismissed as withdrawn, the Revenue accepting that it should have been filed as a writ petition, with liberty to file one within three weeks (paras 5-6). It arises in Refunds, Interest & Condonation matters, on section 244A, section 240 of the Income Tax Act 1961, and was decided by Bombay High Court (K.R. Shriram and Neela Kedar Gokhale, JJ.). 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. Frame the claim as interest on the amount left unpaid, never as interest on interest; the label is what the Revenue attacks. Put the refund intimation and the bank credit advice on record so the shortfall is documented rather than asserted.
Still good law. Followed by the Bombay High Court in Capgemini Technology Services India Ltd v. Director of Income-tax [2025] 181 taxmann.com 768 (Bombay), Writ Petition No. 9876 of 2025, decided 9 December 2025, which applied it (together with India Trade Promotion Organisation and Union of India v. Tata Chemicals Ltd) on s.244A interest. The Revenue's special leave petition was dismissed in Dy. CIT v. Tata Communications Ltd. [2025] 173 taxmann.com 13 / 304 Taxman 664 (SC), SLP (Civil) Diary No. 8207 of 2025, 6 March 2025 (J.B. Pardiwala and R. Mahadevan, JJ.). Read that order for what it is: the Court found an inordinate delay of 444 days with no justifiable reason, rejected the condonation application, added that there was in any event no merit in the petition, and dismissed the petition on delay as well as on merits, without reasons on the substantive question. It is not a reasoned affirmance and adds nothing to the High Court's authority. 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.
Cite this for the enforcement point, not for the principle. The Court's own contribution is that once the Tribunal has decided that s.244A interest is payable, the Assessing Officer's role is confined to giving effect to that direction and he cannot reopen it by distinguishing the authority he was told to apply. The interest-on-interest analysis itself belongs to the Delhi High Court in India Trade Promotion Organisation v. CIT [2014] 361 ITR 646 (Delhi), following CIT v. H.E.G. Ltd. [2010] 324 ITR 331 (SC); the Bombay Bench reproduced it as the principle to be applied on remand. The disposal was a remand for computation, not a direction to pay a quantified sum. The companion IT Appeal No. 650 of 2019 was dismissed as withdrawn on the Revenue's own concession that it should have been a writ petition. The Revenue's SLP was dismissed on 6 March 2025 on a 444-day delay and, without reasons, on merits, so rely on the High Court reasoning rather than on that order. The judgment does not state the assessment years or the amounts in dispute; it turns entirely on the Assessing Officer's failure to obey directions already given. The parallel citations (2023) 335 CTR 983 and (2024) 462 ITR 86 carried in this entry were not found on the citation line of the report consulted, which gives [2025] 173 taxmann.com 12 (Bombay). 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.
This is not a decision that lays down the interest-on-interest principle; it is a decision enforcing one already laid down. The Court quashed and set aside the Assessing Officer's order of 26 August 2019, holding it had not been passed by applying the principles laid down by the Delhi High Court in India Trade Promotion Organisation v. CIT, and remanded the matter to an Assessing Officer to compute the s.244A interest by strictly applying those principles as the Tribunal and the High Court had already directed, the exercise to be completed by 6 October 2023 (para 2). It further directed the Principal Commissioner to assign the matter to an officer other than the one who had twice flouted the directions of the Tribunal and of the Court, and recorded that it was declining, this once, to take action against him. The writ petition was disposed of (para 4). The companion IT Appeal No. 650 of 2019 was dismissed as withdrawn, the Revenue accepting that it should have been filed as a writ petition, with liberty to file one within three weeks (paras 5-6).
TaxSphere, “Tata Communications Ltd v Dy CIT”, https://taxnotice.vittsphere.com/caselaw/case/tata-communications-v-dcit-244a/ (validity last checked 2026-08-19)
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