1998 (7) TMI 78 - HC - Income Tax

Summary

Issues: Petition seeking direction for interest payment under section 244(1A) of the Income-tax Act, 1961.

Analysis:
The judgment delivered by the High Court of Delhi pertained to a petition by an assessee requesting the release of interest payment under section 244(1A) of the Income-tax Act, 1961. The facts of the case highlighted that TDS of Rs. 7,235 was deducted from the assessee, and after an order of assessment was set aside and a fresh assessment order was made, the petitioner sought interest on the amount. The issue at hand was whether section 244(1A) was applicable to the case, which had been previously addressed in the Supreme Court's decision in Modi Industries Ltd. v. CIT [1995] 216 ITR 759. The court referred to the Supreme Court's ruling, emphasizing that once an assessment order is made, any advance tax paid loses its character and is deemed to have been paid in accordance with the order of assessment, thus attracting section 244(1A).

The court concluded that the amount of TDS lost its character upon the initial assessment order, regardless of subsequent set asides or adjustments, and was deemed to have been paid in line with the order of assessment, making section 244(1A) applicable. Consequently, the petition was allowed, and the orders declining interest payment were quashed. The court directed the relevant authority to calculate and release the interest due to the petitioner within a specified timeframe, in accordance with the provisions of section 244(1A) of the Income-tax Act, 1961. The judgment disposed of the petition accordingly, with no specific order regarding costs.