TMI Blog2009 (5) TMI 568X X X X Extracts X X X X X X X X Extracts X X X X ..... der. The assessee-petitioner shall also be entitled to the amount of interest on interest. – decided in favour of assessee. - CWP NO 10223,/07, CWP NO 10224,/07, CWP NO 10225/0 - - - Dated:- 25-5-2009 - KUMAR M. M. and BHALLA H. S., JJ. Judgment: The assessee-petitioner has filed four writ petitions, namely, C. W. P. Nos. 10223, 10224, 10225 and 10235 of 2007, challenging the common order dated April 30, 2007 passed by the Commissioner of Income-tax, Patiala, under section 264 of the Income-tax Act, 1961 (for brevity, "the Act"), in respect of the assessment years 1978-79, 1979-80 and 1980-81. A further prayer has been made for directing the respondents to pay interest to the assessee-petitioner on the amount of refund as per the provisions of section 244(1A) and/or section 214 of the Act, keeping in view the dicta of the hon'ble Supreme Court in the case of Sandvik Asia Ltd. v. CIT [2006] 280 ITR 643. Therefore, the following substantial question of law which arises for consideration of this court is: "Whether in the facts and circumstances of the case, the assessee- petitioner is entitled to payment of interest on the amount of refund in accordance with the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of regular assessment toJanuary 28, 1984when the refund order was issued. The assessee-petitioner did not demand interest on interest as per the calculation made by the assessee himself. The calculation of Rs. 51,046 was only in respect of the period which was not allowed by the Assessing Officer. He has allowed interest under section 214 of the Act fromApril 1, 1978toMarch 26, 1981. The claim made by the assessee-petitioner is that under section 244(1A) of the Act, interest has to be allowed from the date on which such amount was paid to the date of grant of refund. Therefore, the basic difference between the assessee-petitioner and the Assessing Officer is regarding the period for which the interest is payable. C. W. P. No. 10224 of 2007-Assessment year 1979-80 5. OnJune 14, 1978,September 15, 1978andDecember 14, 1978, the assessee-petitioner had paid advance tax amounting to Rs. 8,22,097. The assessee-petitioner filed return declaring loss of Rs. 6,53,170 onJuly 31, 1979. OnMarch 31, 1982, the assessment was completed under section 143(3) of the Act at an income of Rs. 11,71,840. The assessee was found liable to pay Rs. 7,93,781 on account of income-tax and surcharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assessment) to August 22, 1985 (the date of issuance of refund). The assessee-petitioner had not demanded interest on interest. The Assessing Officer has allowed interest under sec-tion 214 of the Act from April 1, 1978 to March 26, 1981, which is the date of regular assessment whereas interest under section 244(1A) of the Act is admissible from the date of payment to the date of issuance of refund. The application datedOctober 8, 1987, filed by the petitioner under section 264 of the Act is on record as annexure P5. Accordingly, the basic difference between the calculations made by the assessee-petitioner and the Assessing Officer has been regarding the period for which interest is payable. C. W. P. No. 10225 of 2007-Assessment year 1980-81 7. On June 15, 1979,September 15, 1979andDecember 15, 1979, the assessee-petitioner had paid advance tax amounting to Rs. 12,90,000. The assessee-petitioner filed return declaring an income of Rs. 16,68,255 (income Rs. 30,75,316 as reduced by brought forward losses/deprecation of Rs. 14,07,065) on August 29, 1980. OnFebruary 28, 2003the assessment was completed under section 143(3) of the Act at an income of Rs.45,77,520. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication filed under section 264 of the Act before the Commissioner of Income-tax by the assessee-petitioner, further interest of Rs. 7,62,394 was demanded. As per the calculation of interest of Rs. 7,62,394, it was only the demand of simple interest for the period from the dates of payment of advance tax, i.e.,June 15, 1979,September 15, 1979andDecember 15, 1979toNovember 8, 1985(date of issuance of refund). The assessee-petitioner has not demanded interest on interest. The Assessing Officer has allowed interest under section 244(1A) of the Act from the date of payment toSeptember 1, 1985. As per section 244(1A) of the Act, no interest is payable for the period of one month from the date of passing of the order in appeal or other proceedings. A copy of the application filed under section 264 of the Act by the assessee-petitioner is on record as annexure P6. C.W.P. No. 10235 of 2007-Assessment year 1980-81 9. The issue raised in the instant petition is regarding non-payment of interest on the refund amount of Rs. 1,88,250 which was determined as payable to the assessee-petitioner after giving appeal effect to the Com-missioner of Income-tax (Appeals) order datedMay 15, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or payment of simple interest on the amount for which aggregate sum in installments of advance tax paid during any financial year in which they were payable exceeded the amount of tax determined on regular assessment from the 1st day of April commencing following financial year to the date of regular assessment. The view of the Commissioner of Income-tax is discernible from paragraph 7 of the judgment which reads thus : "7. According to section 214(1), the assessee had been eligible for simple interest on the amount by which the aggregate sum of any installment of advance tax paid during any financial year in which they were payable exceeded the amount of the tax determined on regular assessment from the first of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year. The expression `regular assessment' has been defined under section 2(40) of the Income-tax Act, 1961 which means the assessment made under section 143 or section 144. The orders of the rectification and orders giving appeal effect are passed under different sections and hence cannot be termed as orders of regular asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs from the end of the month in which such order is passed, the Central Government shall pay to the assessee simple interest at twelve per cent. per annum on the amount of refund due from the date immediately following the expiry of the period of three months aforesaid to the date on which the refund is granted. (1A) Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee, as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in sub-section (1) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted : Provided that where the amount so found to be in excess was paid in installments, such interest shall be payable on the amount of each such installment or any part of such installment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson should only be taxed in accordance with law and hence where excess amounts of tax are collected from an assessee or any amounts are wrongfully withheld from an assessee without authority of law the Revenue must compensate the assessee . . . As already noticed in paragraph supra, the Madras High Court in Needle Industries (P.) Ltd.'s case [1998] 233 ITR 370, has also interpreted the phrase `any amount' in the same manner when con-sidering the provisions of section 244(1A) of the Act, which also uses the same phrase in the context of interest payable by the Revenue. In express terms the court held that the expression referred not only to the tax but also to interest. The court agreed with a similar view taken by the Kerala High Court in the case of Ambat Echukutty Menon [1988] 173 ITR 581. Both these were cases where the court was called upon to decide, whether further interest was payable by the Revenue on interest which had to be repaid to the assessee. In our opinion, the appellant is entitled to interest under section 244 and/or section 244A of the Act in accordance with the terms and provisions of the said sections. The interest previously granted to it has been com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was paid only at the instance and the intervention of this court in Civil Appeal No. 1887 of 1992 datedApril 30, 1997. Interest on delayed payment of refund was not paid to the appellant onMarch 27, 1981, andApril 30, 1986, due to the erroneous view that had been taken by the officials of the respondents. Interest on refund was granted to the appellant after a substantial lapse of time and hence it should be entitled to compensation for this period of delay. . . . 17. It is further pertinent to mention that their Lordships of the hon'ble Supreme Court were dealing with the assessment years 1977-78, 1978-79 and so on and so forth. In the present case also the same assessment years are in question. The aforesaid principles have been followed and applied by the Division Bench of this court in the case of Garga Steel Industries v. Commissioner of Customs, Mumbai [2009] 239 ELT 241 (P H) (Customs Appeal No. 21 of 2006, decided on January 9, 2009). When we apply the principles laid down by their Lordships' of the hon'ble Supreme Court in Sandvik Asia Ltd.'s case [2006] 280 ITR 643 to the facts of the present case, it emerges that the refund claim of the assessee-petitioner has been w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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