TMI Blog1997 (6) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Against the said order of assessment, the petitioner went in appeal under section 246 of the Act and was favoured with substantial relief. On giving effect to the appellate order, it was found that the assessee became entitled to refund of Rs. 1,20,42,846. This amount was refunded to the assessee-company on November 29, 1985. But, the Inspecting Assistant Commissioner allowed interest on Rs. 8,42,161, i.e., the amount which was paid pursuant to the demand notice after the first order purported to be under section 244(1A) of the Act. The assessee-company being dissatisfied with the order, went in appeal before the Commissioner of Income-tax (Appeals) and raised a contention that it is entitled to interest on the entire amount of refund from the first day of assessment year in question, i.e., from April 1, 1982, till the date of refund, i.e., November 29, 1985. But, it failed in appeal. Subsequently, the second appeal was taken to the Tribunal and it got the relief. The order of the Tribunal is dated July 18, 1991. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period which would be the previous year for the assessment year next following the financial year in which it was paid'. After computation of the total income under section 143, the Income-tax Officer will have to determine the tax payable by an assessee. This he can do only after giving credit to the assessee for the amount of income-tax standing to his credit. Once the amount of advance tax has been treated as income-tax payable by the assessee and dealt with as such in the assessment order, there is no scope for treating it as advance tax once again. The excess realisation of advance tax, upon assessment and adjustment, becomes refundable under section 237. No further interest is payable on it under section 214. Interest, if any, on delayed refund is payable under section 243. If a further sum of money becomes refundable as a result of any appellate order, that amount has to be refunded under section 240 and with interest, if any, under section 244. The refund amount is not treated any more in the Act as a portion of the advance tax paid by the assessee. What is refunded pursuant to an appellate order is a portion of what was treated and dealt with as payment of income-tax by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (1A) of section 244 does not affect the operation of section 214 in any manner whatsoever. The period during which interest has to be paid under section 214 is the first day of the relevant assessment year to the date of the assessment order. The period covered by section 244(1A) is the period commencing from the date of payment of tax or penalty. Under Chapter XVII of the Act, tax may be collected from an assessee by way of deduction at source, advance payment and by a notice of demand under section 156. But the amount of tax deducted at source is treated as income-tax paid by the assessee upon the completion of the assessment proceedings (section 199(1)). Similarly, the amount of advance tax paid has to be treated as payment of tax and credit for this amount has to be given to the assessee in the regular assessment (section 219). Any excess amount remaining to the credit of the assessee thereafter will have to be refunded to the assessee. The amount which was retained by the Income-tax Officer and adjusted against the tax demand must be treated as payment of tax pursuant to the assessment order of the assessee. Advance tax or tax deducted at source loses its identity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 214 deals with payment of interest on the amount of tax found to have been paid in excess of the tax determined as payable on the regular assessment. Interest will have to be paid from the first day of the relevant assessment year to the date of the regular assessment, i.e., the first assessment. If the amount on which the interest was payable was varied subsequent to the first assessment, then the quantum of interest had also to be increased or decreased accordingly. But the period for which the interest had to be paid was not altered by the newly substituted sub-section (1A) of section 214. " After so holding, they have summarised their propositions as laid down by them under the head "Summary" at page 808 which is to the following effect : "SUMMARY The position that emerges from the above analysis can be summarised finally as under : (i) Up to March 31, 1975, interest under section 214 is payable from the first day of April of the relevant assessment year to the date of the first assessment order. The amount on which the interest is to be paid is the amount of advance tax paid in excess of the tax payable by the assessee as calculated in the regular assessment (the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt refunded the assessee will be entitled to payment of interest under section 214 without specifying the period for which the said amount will be admissible. That matter has to be considered by the Tribunal on receiving this opinion of ours while considering the case under sub-section (1) of section 260. Mr. Indrakumar, learned standing counsel appearing for the Income-tax Department, has taken a technical objection that, while exercising our jurisdiction under section 256, we cannot express any opinion regarding admissibility of interest under section 244(1A) since that question has not been referred to us. We appreciate his anxiety. But, we find that the assessee had raised the question of admissibility of interest under section 244(1A) of the Act both before the Commissioner of Income-tax (Appeals) as also before the Tribunal. Though the Tribunal does not seem to have considered the same in its proper perspective and was swayed by the consideration that in view of the High Court decisions, the assessees may be entitled to claim interest for the entire period under section 214 itself. The objection raised is highly technical in nature. In our opinion, since the principal ques ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
