Income Tax Interest should be paid upto date of Refund credit and not date of Order: Bombay High Court:

Income Tax Interest should be paid upto date of Refund credit and not date of Order: Bombay High Court The Bombay High Court heard the matter of Lintas India Pvt Ltd vs Assistant Commissioner of Income Tax & Others to check whether its earlier directions regarding tax refunds had been followed.

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Backstory of the case

Earlier, on February 16, 2026, the High Court had ordered the Tax Department to process and grant certain refunds to the petitioner. The case was listed again on April 15, 2026, to review whether the authorities had complied with those directions. During the hearing, the department's lawyer informed the Court that the refunds have been processed. He also stated that six tickets have been raised with the CPC to credit the refund amounts to the company. However, the actual credit of the refund is still pending. On the other hand, the lawyer for the petitioner raised a concern regarding the interest payable on the refund amount. The lawyer submitted that the Income Tax Department has calculated interest only up to February 16, 2026, instead of calculating it up to the actual date when the refund is paid. The lawyer further argued that, under the Income Tax Act, 1961, interest should be paid until the date the refund amount is actually credited.

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After hearing both sides, the Court directed that the matter be listed again on April 24, 2026, for reporting compliance. The judges expressed hope that by that date, the refund amounts would be credited and the additional interest would also be paid. The Court further clarified that the order would be digitally signed and that all parties may act upon a digitally signed copy sent by email or fax.