TMI Blog2004 (9) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioner that interest on the second instalment at the rate of 12 %, is payable - There is considerable force in the second submission made by petitioner that the amount of interest has been withheld by the respondent-Department for a long period and the petitioner was illegally deprived of the use of aforementioned amount - petition succeeds – payment of interest cannot be denied - - - - - Dated:- 15-9-2004 - Judge(s) : M. M. KUMAR. JUDGMENT M.M. Kumar J.- The short question which arises for determination in the instant petition is whether interest under section 214 of the Income-tax Act, 1961 (for brevity, "the Act"), could be denied to the assessee-corporation who had failed to pay the instalment of advance tax in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, a total sum of Rs. 2,88,750 (Rs. 2,75,000 as tax and Rs. 13,750 by way of 5 per cent. surcharge) became payable by the assessee-corporation as advance tax during the financial year 1976-77 in three equal instalments on the dates already specified. The assessee-corporation paid three equal instalments on June 14,1976, September 18, 1976 and December 14, 1976. It is thus obvious that the second instalment was paid after the date specified in section 210(1) of the Act. The assessee-corporation filed its return of income under section 139(1) of the Act on June 29, 1977, declaring a loss of Rs. 6,38,480 for the assessment year in question. Subsequently, a revised return dated September 10, 1979, was also filed by the corporation on Septem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified in section 210(1) of the Act but did not pay any interest in respect of the second instalment paid on September 18, 1976, as is evident from its order annexure P-1. Against the order passed by the assessing authority, the assessee-corporation filed a revision petition under section 264 of the Act before the Commissioner of Income-tax, Patiala (respondent No. 2), and the order passed by the assessing authority was confirmed vide order dated October 8, 1987, and the revision petition filed by the assessee-corporation was dismissed. The order passed by the Commissioner as well as by the assessing authority are the subject-matter of challenge in the instant petition. Mr. Sanjay Bansal, learned counsel for the assessee-corporation, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court in the case of CIT v. Narendra Doshi [2002] 254 ITR 606. Mr. P.S. Patwalia, learned counsel for the respondents, has opposed the submissions made by learned counsel for the petitioner by arguing that there is no lack of bona fides on the part of the Department in withholding the payment of interest on the second instalment of the petitioner. According to learned counsel, the bona fides have been furnished by section 210(1) of the Act as well as by the fact that there was conflict of opinions between various High Courts which could be clarified within these jurisdictions only in Roadmaster Industries' case [1992] 193 ITR 639 by a Division Bench of this court. Learned counsel has also argued that there is no case for paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period and the petitioner was illegally deprived of the use of aforementioned amount. I do not find any condition in the judgment of the Gujarat High Court in the case of D.J. Works [1992] 195 ITR 227 as affirmed by the Supreme Court in Narendra Doshi's case [2002] 254 ITR 606 that a complete lack of bona fides has to be first proved to award interest. The general principle which appears to have prompted the imposition of payment of interest on interest is that the petitioner has been unlawfully deprived of the use of amount which has been illegally withheld by the respondents. In view of the above, this petition succeeds. Orders, annexures P-1 and P-3 passed by the assessing authority and the Commissioner of Income-tax (respondent No. 2) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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