(a) where the refund is out of any tax 5[ collected at source under section 206C or] paid by way of advance tax or treated as paid under section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one 6[ ] per cent for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted: Provided that no interest shall be payable if the amount of refund is less than ten per cent of the tax as determined 7[ under sub- section (1) of section 143 or] on regular assessment;

(b) in any other case, such interest shall be calculated at the rate of one 8[ ] per cent for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates 1 Substituted for' six months from the date of the order referred to in section 241" by the Taxation Laws (Amendment) Act, 1970 , w. e. f. 1- 4- 1971 2 Inserted by the Direct Tax Laws (Amendment) Act, 1987 , w. e. f. 1- 4- 1989 . 3 Ibid. 4 Substituted for" Where, in pursuance of any order passed under this Act, refund of any amount becomes due to the assessee' by the Direct Tax Laws (Amendment) Act, 1989 , w. e. f. 1- 4- 1989 . 5 Inserted by the Direct Tax Laws (Amendment) Act, 1989 , w. e. f. 1- 4- 1989 . 6 The words" and one- half" omitted by the Finance (No. 2) Act, 1991 , w. e. f. 1- 10- 1991 7 Inserted by the Direct Tax Laws (Amendment) Act, 1989 , w. e. f. 1- 4- 1989 . 8 The words" and one- half" omitted by the Finance (No. 2) Act, 1991 , w. e. f. 1- 10- 1991 of payment of the tax or penalty to the date on which the refund is granted. Explanation.- For the purposes of this clause," date of payment of tax or penalty" means the date on and from which the amount of tax or penalty specified in the notice of demand issued under section 156 is paid in excess of such demand. (2) 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 Commissioner whose decision thereon shall be final.