TMI Blog1993 (9) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... his order dated 21-3-1986 on a total income of Rs. 6,86,800 against 'Nil' income claimed by the assessee. While completing the assessment, the ITO had not allowed investment allowance of Rs. 7,90,983 claimed by the assessee. Aggrieved by the said disallowance, assessee preferred appeal to the ITAT, Hyderabad Benches, Hyderabad. The ITAT in IT Appeal No. 974/Hyd/88, vide its order dated 16-6-1989 allowed the claim of the assessee. Consequently, the Assistant Commissioner of Income-tax, Company Circle 4(2), Hyderabad, passed modificatory order dated 28-10-1989, and determined the refund at Rs. 61,452, which includes an amount of Rs. 22,112 being advance tax paid in two equal instalments on 15-6-1982 and 15-9-1982 respectively. Further, while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same to the assessee. Therefore, he directed the Assessing Officer to allow the same as per the provisions of the Income-tax Act. Thus, by the impugned order dated 30-4-1990, he Dy. Commissioner (Appeals) allowed the appeal. (c) Aggrieved by the impugned order passed by the Dy. Commissioner (Appeals), the Revenue came up in second appeal before this Tribunal, and thus, the matter stands for my consideration. 3. It is contended that the Dy. Commissioner (Appeals) erred in directing the Assessing Officer to grant interest under section 214 and section 244(1A) on the excess of advance tax paid on a refund, arising out of the appellate order. The Dy. Commissioner (Appeals)'s order is against the Andhra Pradesh High Court decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n section 244(1A) and also the real ambit of sub-section (2) of section 214 was examined by the Delhi High Court in National Agrl. Co-operative Marketing Federation of India Ltd. v. Union of India [1981] 130 ITR 928 and in the head-note of the decision, the ratio was brought out fully and it is as follows:--- "Held, allowing the petition, that reading sections 214(2) and 244(1A) together, the petitioner would be entitled to interest on the refund of advance tax due to it from the date of initial payment not only up to the date of initial assessment but right up to the date on which the refund was actually made, but as in this case, the petitioner had claimed interest only up to the date of the revised assessment, the interest would be all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no escape from the conclusion that the assessee is entitled to a refund along with interest up to the date of refund. Held, also, that the expression 'regular assessment' in section 214 should be construed as referring only to the first or initial regular assessment and not to subsequent modifications thereof." 4. From this decision, it is clear that the assessee is entitled to interest on the amount of advance tax to the extent it is found refundable from the date of excess payment right up to the date of actual refund. In the facts of this case, assessment was framed on 21-3-1986. The tax deemed was ascertained at Rs. 1,65,915 and the advance tax paid was appropriated towards part of the tax demand, and the remaining tax demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f regular assessment, if some balance remained to the credit of the assessee, that balance is treated as advance tax and the amount adjusted therefrom is treated as payment of tax. The assessee was entitled to interest under section 244(1A) on the amount so adjusted towards tax, if found refundable in pursuance of the appellate order or other proceedings. In this case also, the advance tax paid fell short of the demand raised under the original assessment order dated 21-3-1986. Therefore, it was adjusted only towards part of the tax demand. Thus, the tax paid was found to be refundable by virtue of the appellate order passed by the AAC as well as by the ITAT. Under the modificatory order dated 28-10-1989 therefore, the assessee is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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