Interest on refund.
216. (1) An assessee shall be entitled to receive simple interest at the rate of one-half per cent. per month on any amount refundable to him under section 215 in respect of any financial year for the period mentioned in sub-section (2).
(2) The period referred to in sub-section (1) shall, —
(a) in a case where refund is out of any tax paid by way of advance tax or treated as so paid under section 201 or collected at source under section 203, commence on the 1st day of April next following the financial year and end on the date on which the refund is granted; and
(b) in any other case, commence from the date on which such amount was paid and end on the date on which the refund is granted.
(3) Notwithstanding anything in sub-section (2), in a case where the return is furnished after the due date, the period referred to in sub-section (1) shall commence on the date on which the return is furnished and end on the date on which the refund is granted.
(4) No interest shall be payable under clause (a) of sub-section (2) if the amount of refund is less than ten per cent. of the tax as determined under sub-section (1) of section 149 or on regular assessment.
(5) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the Chief Commissioner or the Commissioner.
(6) The interest under this section shall be increased or reduced in accordance with the variation in the amount on which the interest was payable as a result of any rectification, revision or appellate order under this Code.
(7) The Assessing Officer shall serve on the assessee a notice of demand in such form as may be prescribed specifying the amount of excess interest paid to him where interest is reduced under sub-section (6) and such notice shall be deemed to be a notice under section 162 and the provisions of this Code shall apply accordingly.
(8) An assessee shall be entitled to receive simple interest at the rate of one-half per cent. per month on the amount of interest receivable by him under this section for the period from the date of grant of refund to the date of actual payment of such interest, if such interest is not paid to him along with the refund.
