1992 (3) TMI 19 - HC - Income Tax

Summary

Issues Involved:
The issues involved in the judgment include the computation of total income for the assessment year 1976-77, refundable sums, interest under section 214, appeals to various authorities, grant of interest under section 244(1A), withdrawal of interest granted, and the legality of such actions.

Judgment Details:

1. Computation of Total Income and Refundable Amounts:
The Income-tax Officer computed the total income of the petitioner for the assessment year 1976-77 at Rs. 92,54,730, with a tax assessed at Rs. 53,44,670. The petitioner had paid advance tax and tax deducted at source, resulting in a refundable sum of Rs. 14,33,856. Subsequent revisions and appeals led to adjustments in the total income and additional refunds.

2. Grant of Interest under Section 244(1A):
The petitioner was granted interest under section 214 and later under section 244(1A) on the revised total income. However, a subsequent order by the Inspecting Assistant Commissioner sought to withdraw the interest granted, leading to a legal challenge.

3. Legality of Withdrawing Interest Granted:
The petitioner contended that there was no provision in the Income-tax Act allowing for the withdrawal of interest paid under section 244(1A) even if subsequent assessments found discrepancies. The court analyzed the provisions of section 244(1A) and the legislative intent behind it, concluding that the Assessing Officer lacked the authority to withdraw the interest already granted.

4. Applicability of Section 244A and Conclusion:
The judgment highlighted the insertion of section 244A in the Act from April 1, 1989, indicating the legislature's recognition of the need for provisions regarding the recovery of interest paid under section 244(1A). The court allowed the Special Civil Application, quashing the order attempting to withdraw the interest granted under section 244(1A).

5. Additional Case and Disposition:
A similar issue raised by another company was also discussed, emphasizing the interpretation of section 244(1A) and the limitations on withdrawing interest granted. The court's decision in the Special Civil Application was applied to this case as well, with the rule being discharged.

This judgment clarifies the legal aspects surrounding the grant and withdrawal of interest under section 244(1A) of the Income-tax Act, emphasizing the statutory limitations on such actions and the subsequent legislative amendments to address these issues.