Section 435 — Refund on Appeal etc. | ITA 2025

Section 435 of the Income-tax Act, 2025 corresponds to s. 240 of the Income-tax Act, 1961. STATUTORY ARCHITECTURE Where any order in appeal / revision / other proceeding results in refund, AO must give effect within prescribed time (3…

Section 435 — - REFUND ON APPEAL ETC.

Section 435 of the Income-tax Act, 2025 corresponds to s. 240 of the Income-tax Act, 1961.

Statutory text — Income-tax Act, 2025

(1) Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the As- sessing Officer shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make any claim in that behalf.

(2) Where, by the order as referred to in sub-section (1),—

(a) an assessment is set aside or cancelled and an order of fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessment;

(b) the assessment is annulled, the refund shall become due only of the amount, if any, of the tax paid in excess of the tax chargeable on the total income returned by the assessee. Correctness of assessment not to be questioned.

STATUTORY ARCHITECTURE

Where any order in appeal / revision / other proceeding results in refund, AO must give effect within prescribed time (3 months from end of month in which order is received). Distinct from refund consequent to original assessment -- this is a consequential refund.

PRACTITIONER PLANNING NOTES

Common situation: ITAT / HC reverses additions made in assessment; refund follows automatically -- but practical experience shows AO delays giving effect.
Remedy for delay: writ to HC under Article 226 commanding compliance within fixed time.
Interest u/s 437 / 244A continues to accrue till actual refund.

CROSS-REFERENCES

s. 263 (filing of return).
s. 270 [143(1)] (intimation).
s. 245 (set-off of refund against demand).
s. 119(2)(b) (condonation of delay).

← All sections (537)Act 2025 hub

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
2025 provision	1961 counterpart
s. 435 -- Refund on Appeal etc.	s. 240