1987 (12) TMI 17

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..... d in this batch of cases relates to the assessment years 1961-62 to 1963-64. For these years, certain refunds became due to the respondent (assessee) as a result of the orders passed by the Supreme Court. These amounts consisted of income-tax, penalty and interest levied under section 220 of the Income-tax Act. The assessee failed to comply with the notice of demand. So interest under section 220 of the Act was levied and collected. In pursuance of the decision of the Supreme Court, amounts became refundable to the assessee. While granting the refund, the Income-tax Officer allowed interest under section 244 of the Act in respect of the amounts representing income-tax and penalty. He did not award interest under section 244 of the Act on th .....

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..... iled by the Revenue were dismissed. Thereafter, the Revenue filed an application to refer certain questions of law arising out of the appellate order of the Tribunal dated October 13, 1983. The Tribunal accordingly referred the question of law formulated hereinabove for the decision of this court. We heard counsel for the Revenue and also counsel for the assessee. The argument put forward before the Tribunal was reiterated before us. It was contended that the Appellate Tribunal erred in holding that the refund of interest under section 220(2) of the Act is " an amount " which comes within the purview-of section 240 and, therefore, eligible for the interest contemplated by section 244(1) of the Act. We are unable to accept this plea. Sect .....

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..... assessee simple interest at fifteen per cent. per annum on the amount of refund due from the date immediately following the expiry of the period of three months aforesaid to the date on which the refund is granted. It is common ground that the amount collected by the Revenue included also interest levied and collected under section 220 of the Act. The amounts became refundable to the assessee as a result of the order passed by the Supreme Court. The refund of the amounts was made to the assessee in consequence of such an order passed by the court. That was done under section 240 of the Act. It cannot be disputed that incometax, penalty and interest collected became refundable to the assessee. Whenever refund of any amount becomes due to .....

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