M/S K LAKSHMANYA AND COMPANY vs COMMISSIONER OF INCOME TAX

The Supreme Court ruled that the High Court of Karnataka erred in denying the assessee interest under Section 244(A) of the Income-Tax Act, 1961, following a partial waiver of interest by the Settlement Commission. The Court established that the provisions of Section 244(A) apply to refunds arising from waivers of interest, and the discretion exercised by the Settlement Commission does not negate the right to claim such interest. Consequently, the Supreme Court set aside the High Court's judgment and restored the orders of the C.I.T. (Appeals) and the ITAT, allowing the assessee's claim for interest on the refund.