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Issues:
- Appeal filed by revenue against order of CIT (A) directing ITO to allow interest u/s 214 on tax refund. - Dispute over interest due u/s 214 on tax refund amounting to Rs. 61,060 for asst. yr. 1975-76. - ITO's rejection of interest due u/s 214 based on cheque presentation date. - Commissioner (A) accepting assessee's claim for interest u/s 214. - Revenue's appeal to Tribunal against Commissioner (A)'s decision. - Interpretation of payment date for cheque transactions in relation to tax payments. - Applicability of various court decisions and CBDT circular on the issue. - Tribunal's confirmation of Commissioner (A)'s decision and dismissal of revenue's appeal. Analysis: 1. The appeal before the Appellate Tribunal concerned the revenue's challenge against the CIT (A)'s order directing the ITO to allow interest under section 214 of the IT Act on a tax refund of Rs. 61,060 for the assessment year 1975-76. 2. The dispute arose when the ITO, despite acknowledging the entitlement of the assessee to interest under section 214 as per the CIT (A)'s order, failed to include the interest amount in the refund order issued. The assessee's Chartered Accountants highlighted this omission and requested rectification, which the ITO initially rejected. 3. The ITO's rejection was based on the argument that the cheque for advance tax payment was presented at the IT Department counter but not tendered at the Reserve Bank within the stipulated time. This led to the ITO denying the interest claim under section 214 of the Act. 4. However, the Commissioner (A) overturned the ITO's decision, citing the Bombay High Court's precedent in a similar case and emphasizing that there should be no distinction between payments made at different counters. The Commissioner held that the ITO was unjustified in rejecting the assessee's application for rectification. 5. The revenue contended that there could be differing opinions on the admissibility of interest under section 214, making section 154 inapplicable. The Tribunal, after examining the facts, noted that the Bombay High Court's decision applied directly to the case, leaving no room for dispute on the issue within the court's jurisdiction. 6. Various court decisions, including those of the Supreme Court and High Courts, were cited to establish that a cheque payment, once encashed, relates back to the date of receipt by the payee. This principle was reiterated in multiple cases, supporting the assessee's position in the present matter. 7. The Tribunal highlighted that all relevant judicial decisions and even a CBDT circular favored the assessee's case, indicating a unanimous stance against the revenue's position. Consequently, the Tribunal upheld the Commissioner (A)'s decision and dismissed the revenue's appeal, confirming the allowance of interest under section 214 on the tax refund amount.
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