S. 234D applies even to refunds granted prior to 1.6.2003

The argument that as in Bajaj Hindustan it had been held that s. 234D did not apply to refunds granted prior to 1.6.2003, the Explanation to s. 234D inserted by the FA 2012 w.r.e.f. 1.6.2003 (which provides that s. 234D shall also apply to assessment years commencing pre 1.6.2003) did not apply to the assessee is not acceptable because Explanation 2 is a declaratory/ clarificatory amendment. The alternate argument, relying on Kerala Chemicals 323 ITR 584 (Ker) that interest can be charged only from 1.6.2003 is also not acceptable in view of the language of Explanation 2 to s. 234D.

 CIT V Indian Oil Corporation -