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TMI Blog2010 (4) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A-II) dated December 11, 1968 wherein the amount on which interest under section 214 is allowable has been clarified. (4) The learned Commissioner of Income-tax (Appeals) has erred in law and on facts in directing to allow interest under section 244(1A) on the amount of prepaid taxes ignoring the facts that interest under section 244(1A) is payable only on refund of amount paid in pursuance of any order of assessment or penalty. (5) The order of the learned Commissioner of Income-tax (Appeals) is erroneous on facts as well as in law, therefore, the order of the learned Commissioner of Income-tax (Appeals) be set aside and that of the Assessing Officer be restored on this issue." 2. The facts relating to each year involved are as under : "Assessment year 1986-87 The assessee paid total tax of Rs. 1,15,12,000. It also paid self-assessment tax of Rs. 29,00,000 under section 140A before filing the return. Thus, the total tax payment as per return of income was Rs. 1,44,12,000. The assessee filed its return of income showing total income of Rs. 1,18,76,950, which was assessed under section 143(3) dated March 29, 1989 at a figure of Rs. 2,64,76,290. This assessment was revised un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Commissioner of Income-tax (Appeals) has held that the same should be allowed to the assessee firstly from the date of regular assessment till the date of grant of refund on the amount of prepaid tax found in excess of the tax assessed under section 251 and further interest from the date of payment of regular tax Rs. 11,30,671 till the date of grant of fund in respect of the assessment year 1986-87 and similar directions were given for the assessment year 1988-89. The Department is aggrieved by such directions given by the learned Commissioner of Income-tax (Appeals) to the Assessing Officer and hence has filed the above ground of appeal. 4. The learned Departmental representative after narrating the facts relying on the order of the Assessing Officer and grounds of appeal, pleaded that the learned Commissioner of Income-tax (Appeals) was wrong in directing the Assessing Officer to grant interest to the assessee for both the above-mentioned assessment years under the provisions of sections 214 and 244(1A). 5. On the other hand, it was submitted by the learned authorised representative that the case law relied upon by learned Assessing Officer cannot be applied to the years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch will include tax deducted at source and advance tax to the extent the same has been retained and treated by the Income-tax Officer as payment of tax in discharge of the assessee's tax liability in the assessment order), becomes refundable wholly or in part as a result of any appellate or other order passed, the Central Government will have to pay the assessee interest on the refundable amount under section 244(1A). For the purpose of this section, the amount of advance payment of tax and the amount of tax deducted at source must be treated as payment of income-tax pursuant to an order of assessment on and from the date when these amounts were set off against the tax demand raised in the assessment order, in other words, the date of the assessment order. (iii) With effect from April 1, 1985, interest payable under section 214 will increase or decrease in accordance with the variation in the quantum of the excess payment of tax brought about by orders passed subsequent to the regular assessment as mentioned in sub-section (1A)." 7. He contended that the learned Commissioner of Income-tax (Appeals) while referring to the abovementioned position of law as declared by the apex cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Rs. 44,427. The original assessment for the period was completed under section 143(3) of the Act on February 25, 1985. The tax assessed was at Rs. 9,16,05,911. Thus, as per the original assessment order, the petitioner was required to pay an additional amount by way of tax to the extent of Rs. 8,42,161. Issue-Whether, the Tribunal was right in holding that the assessee was entitled to interest under section 214 on the amount of Rs.1,20,42,846 refunded by the Inspecting Assistant Commissioner while giving effect to the order passed by the Commissioner of Income-tax (Appeals) in first appeal. Findings-Yes." 9. Thus, it was submitted by him that order of the Commissioner of Income-tax (Appeals) should be upheld. 10. We have carefully considered the rival submissions in the light of material placed before us. The learned Assessing Officer while denying the relief to the assessee, claimed before him by way of an application filed under section 154, has relied upon the decision of the hon'ble Allahabad High Court in the case of Lala Laxmipat Singhania (supra). He observed that in the regular assessment when the assessment was completed there was a demand raised against the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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