TMI Blog2001 (2) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... t of interest amounting to Rs. 1,90,499 payable under section 214 of the Income-tax Act, 1961 ?" The dispute relates to the assessment year 1967-68. The factual position which is almost undisputed is essentially as follows : The assessee had paid advance tax of Rs. 8,08,667 for the concerned assessment year. However, on assessment the total demand raised by the order of assessment dated March 6, 1972, was Rs. 9,65,331. While raising the demand, the Income-tax Officer had; not given credit for the tax paid and had also not allowed certain other reliefs. The assessee filed an application for rectification on April 10, 1972. The Income-tax Officer passed an order on October 10, 1972, by which he held that the assessee was entitled to ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 237 of the Act and therefore the assessee was not entitled to any interest under section 244 of the Act, as claimed. The assessee carried the matter in appeal before the Tribunal. The assessee's stand was that interest of Rs. 1,90,499 was allowed to it as per the appellate order of the Appellate Assistant Commissioner dated July 14, 1976, and was therefore a refund falling under section 240 of the Act. The said provision laid down that where, as a result of any appeal or any other proceeding under the Act refund of any amount becomes due to the assessee, the Income-tax Officer shall, except as otherwise provided in the Act, refund the amount to the assessee without his having to make any claim in that behalf. Reference was also made to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stipulated period. It was held that the assessee was entitled to interest only for the period from November 1, 1976, to April 21, 1977. On being moved for a reference, the question as set out above has been referred for the opinion of this court. We have heard learned counsel for the parties. It is the stand of learned counsel for the Revenue that in essence the Tribunal's order means grant of interest on interest which is not permissible under the statute. It is further his case that section 237 of the Act defines what is refund and therefore the assessee is not entitled to any sum which is not covered by section 237. Elaborating, he stated that it was the amount of advance tax which was paid in excess which is to be refunded and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess. 240. Refund on appeal, etc.--- Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the Assessing Officer shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make any claim in that behalf : Provided that where, by the order aforesaid,--- (a) an assessment is set aside or cancelled and an order of fresh assessment is directed to be made, the refund, if any, shall bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount so found to be in excess was paid in instalments, such interest'shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted : Provided further that no interest under this sub-section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding : Provided also that where any interest is payable to an assessee under this sub-section, no interest under sub-section (1) shall be payable to him in respect of the amount so found to be in excess. (2) Where a refund is withheld under the provisions of section 241, the Central Government shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astened on the Central Government in case of failure to grant refund within the stipulated time in a case where refund is due to the assessee in pursuance of an order referred to in section 240. A combined reading of both the provisions makes the position crystal clear that it is any amount which becomes due to the assessee and not necessarily the tax component. Undisputedly, a sum of Rs. 1,90,499 which qualifies for interest became payable to the assessee on the basis of an order passed under section 240 of the Act. Merely because this was inclusive of an amount which was payable under section 214 of the Act, that would not make the position any different. It is an amount which became due to the assessee on the basis of the appellate order ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
