TMI Blog2005 (8) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 214 - we direct respondent to compute the interest payable to the petitioner - - - - - Dated:- 10-8-2005 - Judge(s) : DR. S. RADHAKRISHNAN., J. H. BHATIA. JUDGMENT The judgment of the court was delivered by Dr. S. Radhakrishnan J.-In this petition, the petitioner has challenged the order dated June 14, 1988, passed by the first respondent-the Commissioner of Income-tax with regard to the assessment year 1982-83 and the assessment year 1983-84 for the claim of interest. The brief facts are that on October 8, 1982, the petitioner-company had filed a return of income for the assessment year 1982-83 declaring a loss of Rs. 23,82,75,310. It appears that prior to that, the petitioner-company had already paid a sum of Rs. 6,30,00,000 as an advance tax. Over and above, a sum of Rs. 8,44,150 was also deducted at source and paid as tax to the respondents. On June 5, 1984, the Inspecting Assistant Commissioner, Assessment Range II (B), Bombay had computed the total income of the petitioner-company at Rs. 7,93,48,600. The Inspecting Assistant Commissioner determined a refund of Rs. 1,19,78,111 together with the interest at Rs. 31,14,306 under section 214 of the Income-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 264 of the Income-tax Act claiming such interest under sections 214 and 244(1A) of the Income-tax Act. In support of both the aforesaid applications filed by the petitioner, the petitioner had appeared before the concerned authority - respondent No. 1 (Commissioner of Income-tax) on June 2, 1988, and had made his submissions. Finally, respondent No. 1-Commissioner of Income-tax, by his order dated June 14,1988, had declined to grant any interest for the assessment years 1982-83 and 1983-84. We have perused the order dated June 14, 1988, passed by the Commissioner of Income-tax declining to grant such interest. Mr. Pardiwala, learned counsel for the petitioner has brought to our notice that the Commissioner of Income-tax has erroneously proceeded on the basis that the petitioner's case would be covered by the provisions of law as it stood prior to the amendment which came into effect on April 1, 1985. Mr. Pardiwala, therefore, contended that as far as the petitioner's case is concerned, the Commissioner of Income-tax ought to have considered the case in view of the changed law and not by applying the law as it stood prior to the amendment of 1985. Mr. Pardiwala has conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. [1984] 146 ITR 452 (FB). However, it is urged on behalf of the Department that in the present matter the Taxation Laws (Amendment) Act, 1984, has no application. That, the said amending Act does not operate retrospectively. That in the present matter, the regular assessment was completed on July 25, 1983. That, since the Taxation Laws (Amendment) Act, 1984, has been brought into force with effect from April 1, 1985, i.e., after the passing of the regular assessment order, the Assessing Officer erred in granting interest to the assessee with effect from April 1, 1980. We do not find any merit in this argument. The Taxation Laws (Amendment) Act, 1984, is procedural in nature and, therefore, it will apply to all pending actions. Secondly in the present matter, the right to receive the interest accrued to the assessee only on October 24, 1988, when the Assessing Officer gave effect to the order of the first appellate authority dated December 11, 1987, by which the assessee's appeal came to be allowed. Therefore, the Amending Act, 1984, would apply to this case. Lastly, a bare reading of section 214(1A) indicates that the said section 214(1A) would apply to all cases where interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce tax or tax deducted at source loses its identity as soon as it is adjusted against the liability created by the assessment order and becomes tax paid pursuant to the assessment order. Therefore, the phrase 'any amount having been paid... after March 31, 1975' occurring in sub-section (1A) of section 244 must be construed to mean not only the amount which has been paid directly pursuant to the order of assessment but will also include the amount of tax deducted at source and advance tax, which were lying to the credit of the assessee and were ultimately adjusted and set off against the tax demands raised in the assessment order. The excess amount of tax paid under sub-section (1A) of section 244 must be calculated by treating the amount of tax deducted at source and the amount of advance tax which were adjusted against the assessee's liability to pay tax as well as the amount of tax paid directly upon the assessment under Chapter XVII of the Income-tax Act. In other words, so far as the amount of advance tax is concerned, it must be understood to have been paid 'in pursuance of any order of assessment' only on the date of the original order of assessment-and not on the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification. Mr. Daniel, learned counsel who appeared on behalf of the respondents-Department, could not dispute the propositions of law as laid down by this court in the case of Saswad Mali Sugar Factory Limited [2001] 249 ITR 756 while interpreting section 214 of the Income-tax Act, as well as by the Supreme Court in the case of Modi Industries Ltd. [1995] 216 ITR 759 while interpreting section 244(1A) of the Income-tax Act. Having regard to the facts and circumstances of the case, we are not going to determine the exact amount of interest payable to the petitioner. However, we make it clear that the law has been very clearly laid down by the Division Bench of this court in the aforesaid case of Saswad Mali Sugar Factory Limited [2001] 249 ITR 756 so far as section 214 of the Income-tax Act is concerned, and by the Supreme Court in the aforesaid case of Modi Industries Ltd. [1995] 216 ITR 759 so far as section 244(1A) of the Income-tax Act is concerned. Under these circumstances, we direct respondent No. 1 to compute the interest payable to the petitioner as indicated in the two charts produced before us by learned counsel for the petitioner for both the assessment years 1982-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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