9911796707
TMI Blog1982 (11) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... order wherein this amount of Rs. 62,085 originally brought to tax was excluded. The assessee became entitled to a refund of Rs. 27,014 by order of the ITO under section 154 passed on 8-12-1980. The assessee wrote to the ITO on 29-12-1980 that he had not authorised interest under section 244(1A). The ITO replied on 2-1-1981 that the assessee was not entitled to the refund on his understanding of the provision. He took the view that such refund is possible only on orders passed on appeal or revision and not on an order under section 154. The assessee went in appeal against the order under section 154 itself claiming that interest should have been authorised along with the refund in the order under section 154 itself. The first appellate authority confirmed the finding of the ITO. It was the assessee's case that he was entitled to interest from the date of payment till the refund under section 244(1) and 244(1A). The first appellate authority took the view that he was eligible to neither of the interest (sic). The assessee is, therefore, in second appeal. The learned counsel for the assessee repeated the arguments raised before the authorities below. He claimed that the words ' other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hends the amount of refund authorised, as refund is consequential to determination of tax. We have, therefore, to decide the question of jurisdiction after our finding whether section 244(1A) is mandatory as contended by the assessee. 4. Section 244 is listed under the heading ' Interest on refund where no claim is needed '. Section 244 is reproduced as under : " 244. Interest on refund where no claim is needed---(1) Where a refund is due to the assessee in pursuance of an order referred to in section 240 and the Income-tax Officer does not grant the refund within a period of three months from the end of the month in which such order is passed, the Central Government shall pay to the assessee simple interest at twelve 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. (1A) Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee, as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having been foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case is the assessment year 1978-79 and the payment of tax was by way of tax deducted at source after this date. No doubt, tax deduction has been made under section 192, where the tax payment, as rightly pointed out by the learned departmental representative, is one on behalf of the assessee oven as mentioned in Part B of Chapter XVII of the Act, in more than one place, as for example, specifically under section 199 of the Act. It is the assessee's case that tax paid on behalf becomes tax paid by the assessee on adjustment and that the scheme under section 244(1A) is for payment of interest from the date on which such amount was paid. He, therefore, seeks interest from the date when tax was deducted at source, or in the alternative, from the date on which the adjustment was made, i.e., the date of assessment. The issue, in our opinion, is answered very easily because of the definition of the word ' refund ' in section 237 of the Act which reads as under : " If any person satisfies the Income-tax Officer that the amount 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 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar interest payable by the assessee when there is a shortfall. Interest is payable by the Government or the assessee, as the case may be, only in respect of advance tax and there is no such similar scheme for excess paid by way of tax deducted at source. In the case of refunds under Chapter XIX, interest is stipulated, under section 243 of the Act, on refunds delayed beyond a period of three months, whether the refund is of advance tax or tax deducted at source, as long as the assessee's income is from sources other than dividend and interest in securities. Section 244(1) interest is allowed without claim for refunds similarly delayed as a result of appeals. In other words, section 243 grants interest on normal refund while section 244(1) grants interest on appeal refunds. Section 244(1A) was introduced by Taxation Laws (Amendment) Act, 1975 with effect from 1-10-1975 on the recommendation of the Select Committee on Taxation Laws (Amendment) Bill, 1973. The Select Committee while recommending the provisions observed as under : " Clause 56 (original clause 57) ; clause 97 (original clause 105) and clause 118 (original clause 132) :--- The amendments made in clause 56 are of a cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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