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TMI Blog1983 (11) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... nt the interest beyond the date of the original assessment under section 143(3) of the Act on the ground that there was no provision in the Act to grant interest under section 214 on the refund due to the assessee on account of the appellate orders. He, therefore, rejected the assessee's claim, accordingly. On appeals being filed by the assessee, the Commissioner (Appeals) referred to the Calcutta High Court decision in the case of Chloride India Ltd. v. CIT [1977] 106 ITR 38, the Bombay High Court decision in the case of Binod Mills Co. Ltd. v. S.A. Kadre, EPTO [1980] 122 ITR 778 and the Madras High Court decision in the case of Rayon Traders (P.) Ltd. v. ITO [1980] 126 ITR 135 and held that the Courts had taken an unanimous view that an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided on the question whether the assessee was eligible for interest up to the date of the final order granting the refund as indicated in the aforesaid Punjab and Haryana High Court decision. It was a highly controversial issue whether an assessee can claim such an interest under section 214. The assessee had called upon the assessing authority to grant relief to it under section 154. As explained by the learned Judges of the Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50, such a controversial issue cannot be dealt with under section 154. In the circumstances the learned departmental representative proceeded to argue that the order of the Commissioner (Appeals) allowing the assessee's claim should be rever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est up to the date of refund under section 214(2). They also approved the ruling of the Madras High Court to the effect that whenever an assessee paid advance tax in excess of the tax found to be due, he would be entitled to interest under section 214(2) read with section 219 of the Act up to the date of refund if the refund was made or had to be made after the regular assessment. Referring to the arguments on behalf of the revenue to the applicability of section 154 to a similar situation, the learned counsel has referred to the Allahabad High Court decision in the case of Omega Sports & Radio Works v. CIT [ 1982] 134 ITR 28, to the effect that the law laid down by a State High Court was the final word on the subject so far as all the judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the proceedings under section 154 in progress before the assessing authority, viz., the IAC. Two questions arise before us for determination. Firstly, whether the assessee was eligible for the interest up to the date of the order granting the actual refund consequent upon the appellate authority's order and secondly, if the original authority, viz., the ITO/IAC did not grant such a refund up to the date of the consequential order, whether it was a mistake apparent from record amenable to rectification under section 154. For this purpose, we shall have first to interpret the meaning of the term ' regular assessment ' appearing in section 214. The interest is payable up to the date of the regular assessment as stated in that section. For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate. 6. On the linked question whether the failure on the part of the ITO/IAC to grant interest in the consequential order up to the date of such an order was a ' mistake ' apparent from record, which was amenable to rectification under section 154, we have the Allahabad High Court decision in the case of Omega Sports & Radio Works, which has explained the law on the subject to the effect that a mistake apparent from the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there can be two opinions. If there is a decision on a particular point by the High Court of a State, it is binding on the income-tax authorities in that State and merely because t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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