TMI Blog1986 (4) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... together and disposed of by this common order for the sake of convenience. 2. These two orders have been passed against the appellate order passed under section 154 of the Income-tax Act, 1961 ('the Act'). The assessee claimed interest on refunds due to it for the assessment year 1968-69 and 1976-77. In orders under section 154, the ITO refused to give any refund. On appeal, the AAC by the commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This assessment was set aside on 26-4-1975 and another assessment was made which was also set aside on 2-2-1979. The next assessment was made on 28-3-1981 under section 144 of the Act which was again reopended under section 146 of the Act. The final assessment for this year was made on 23-9-1981 according to which the entire regular demand of Rs. 4,469 became refundable. The ITO issued refund vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d delayed beyond a period of three months. 5. Shri B. Chakraborty, the learned representative for the assessee, on the other hand, supported the order of the AAC on the ground that the refund arose when the demand was set aside on 26-4-1975 and so interest started running after the expiry of three months from 26-4-1975. 6. Coming to the assessment year 1976-77, Shri S. K. Lahiri pointed out th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of a regular assessment. 7. We have considered the contentions of both the parties as well as the facts on record. In our opinion, when an assessment is set aside and the assessment is restored to the file of the ITO the demand that was earlier raised by the ITO ceases to exist. But the question which arises is whether any amount becomes immediately refundable. In our considered opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iately refundable to the assessee but had to be kept as deposits to be adjusted against the regular assessment again to be made by the ITO in accordance with the directions of the appellate authority. Hence, we reverse the order of the AAC for the assessment year 1976-77 and restore that of the ITO. 8. In the result, the appeal for the assessment year 1968-69 is dismissed while the appeal for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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