TMI Blog2005 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... (D) If this hon'ble court is pleased to hold that on interpretation of section 214, the petitioner is not entitled to interest under section 214 in full, then this hon'ble court be pleased to declare that, that part of section 214 which restricts the payment of interest only on the payment made in the financial year is ultra vires the Constitution of India and, therefore, such restriction is bad in law; (E) Pending the hearing and final disposal of this application, this hon'ble court be pleased to ask the respondent to pay forthwith the amount of Rs. 36,31,500 on execution of an undertaking to return the said moneys forthwith if the final outcome of this application is against the petitioner. (F) This hon'ble court be pleased to grant such further or other relief as the interest of justice demands in the matter. (G) This hon'ble court be pleased to allow this petition with cost against the respondents." The controversy involved in the present petition pertains to the assessment year 1988-89. The petitioner is a public limited company. In relation to the said assessment year, the petitioner had submitted a "nil" estimate of advance tax under section 210 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of assessment or penalty, hence, no interest was admissible on refund of self-assessment tax. Being aggrieved by the stand of the respondents, the petitioner has moved the, present petition claiming interest under section 214(1) of the Act with effect from July 1, 1988, to September 25, 1992, on the amount of Rs. 54,00,000. Alternatively, it has been prayed that if it is held that the petitioner is not entitled to interest under section 214(1) of the Act, the petitioner would be entitled to interest under section 244(1A) of the Act, from February 1, 1991, to September 25, 1992, i.e., from the date of the assessment order to the date of payment of refund. Heard Mr. J.P. Shah, the learned advocate on behalf of the petitioner and Mr. B.B. Naik, the learned standing counsel for the Revenue on behalf of the respondents. At the outset, Mr. Shah has submitted that he does not press the relief prayed for vide paragraph No. 11(D) of the petition, namely, the challenge to the constitutional validity of section 214 of the Act. In so far as the claim for interest under section 214 of the Act is concerned, Mr. Shah has very fairly drawn our attention to a decision of this court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest of refund where it is clearly admissible had been paid immediately without even waiting for the maximum period permitted under the statute to elapse. That as there was ambiguity as regards the provisions under which the amount in question was paid, the petitioner had not been paid interest on the said amount. It was submitted that no fault can be found in the conduct of the respondents, accordingly, the Government should not be penalized by burdening it with the liability of payment of interest on interest. It was submitted that, in the circumstances, this was not a fit case for awarding interest on interest. This court has, in the case of Life Bond Fabric P. Ltd. [1995] 216 ITR 529, held that unless the payment of advance tax is made in the manner provided for in the Act, it cannot be deemed that advance tax payment has been made. That, in order to recognize payments of tax as advance tax, it is necessary that the said tax must be paid in the financial year immediately preceding the assessment year and it must be paid in accordance with the provisions of sections 207 to 213 of the Act. In the present case, it is an admitted position that the amount of Rs. 54,00,000 on whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er words, the date of the assessment order." Applying the ratio of the aforesaid decision to the facts of the present case, the petitioner would be entitled to interest on the amount of Rs. 54,00,000 from February 1, 1991, to September 25, 1992. As regards the prayer for grant of interest on the amount of interest payable on the sum of Rs. 54,00,000, strong reliance has been placed on behalf of the petitioner on the decision of this court in the case of D.J. Works v. Deputy CIT [1992] 195 ITR 227 as well as the decision of the apex court in the case of CIT v. Narendra Doshi [2002] 254 ITR 606. In D.J. Works v. Deputy CIT [1992] 195 ITR 227, this court has held that it was the duty of the Assessing Officer to award interest on the excess amount of tax paid by the petitioner, while giving effect to the appellate order and granting refund of excess amount. It was held that if excess tax paid cannot be retained without payment of interest, the interest which is payable thereon also cannot be retained without payment of interest. That, once the interest amount becomes due, it takes the same colour as the excess amount of tax which is refundable on regular assessment. The court was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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