TMI Blog1991 (2) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... er transpired that interest under section 244(1A) had not been allowed by the ITO on the said refund of Rs. 24,687. The respondent accordingly applied to the IAC(A) vide letter dated 20-12-1984 requesting therein for grant of interest under section 244(1A) from the date of payment upto 31-8-1984. The IAC(A) vide order dated 10-6-1986 however allowed interest only on a sum of Rs. 3,084. In the said order it was noted that subsequent to the order dated 31-8-1984 determining a refund of Rs. 24,687 another order had been passed on 18-12-1985 raising a demand of Rs. 21,603 against the respondent and hence the assessee was entitled to interest under section 244(1A) only on the difference viz. Rs. 3,084. 3. The assessee preferred an appeal agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 18-12-1985 then the refund due to the assessee as a result of the order of the Tribunal would have been only a sum of Rs. 3,084 and not Rs. 24,687 as had been worked out by the Assessing Officer. (iii) That the words used in section 244(1A) were " liable to pay " and the facts on record showed that the assessee was entitled on the one hand to a refund of Rs. 2,44,687 in view of the order dated 31-8-1984 and on the other hand it was liable to a tax demand of Rs. 21,603 since investment allowance granted in the course of the original assessment proceedings was required to be withdrawn ; the net effect of both of these actions being a net refund of Rs. 3,084. On the basis of the aforesaid arguments the learned D.R. urged that the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly concerned. The assessing officer in this order took note of the earlier orders viz. those passed on 31-8-1984 determining the refund of Rs. 24,687 and the one passed on 18-12-1985 creating a demand of Rs. 21,603. He allowed interest under section 244(1A) on the net of the aforesaid amounts viz., Rs. 3,084. In our opinion, this action on the part of the Assessing Officer cannot be sustained in law inasmuch as the assessee was entitled to interest under section 244(1A) on a sum of Rs. 24,687 and the action of the Assessing Officer in taking into account the order passed much later viz., on 18-12-1985 was not justified. By adjusting the demand raised against the refund and allowing interest on the balance the Assessing Officer had in fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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