2015 (1) TMI 1159 - HC - Income Tax

Interest under Section 244A and 244(1A) - revision u/s 263 - Held that - CIT had no jurisdiction to pass revision order u/s.263 on 12.03.03. On that day, the order of this court dt.30.07.01 did exist. On the contrary, this order has become final. As regards grant of interest on refund, we find that Tribunal was justified in holding that refund should be granted with interest. Accordingly, we hold that the Tribunal was right in law in directing the Assessing Officer to allow interest under Section 244A and 244(1A) of the I.T Act. - Decided in favour of assessee.

Summary

Issues involved:
Challenge to Tribunal's order allowing appeal by Assessee, substantial question of law regarding interest under Section 244A and 244(1A) of the Income Tax Act.

Analysis:
1. The appellant-revenue challenged the Tribunal's order allowing the Assessee's appeal. The Assessee filed the return for the Assessment Year 1984-85, declaring total income. The Assessing Officer passed an order under Section 143(3) of the Income Tax Act. The Assessee then appealed to the Commissioner of Income Tax (Appeals), who dismissed the appeal. Subsequently, the Assessee appealed to the Tribunal, which allowed the appeal, leading to the revenue's challenge in this appeal.

2. The substantial question of law formulated by the Court pertained to whether the Tribunal was correct in directing the Assessing Officer to allow interest under Section 244A and 244(1A) of the Income Tax Act. The appellant-revenue contended that the Tribunal erred in following a previous decision and not properly appreciating the material on record. The respondent-assessee, however, supported the Tribunal's order, citing previous decisions in favor of the assessee.

3. The Court examined the issue and referred to a previous decision involving a Special Bench of the ITAT, which had addressed similar matters. The Court noted that the issue was already concluded by a previous decision. The Court highlighted the specifics of the previous decision, emphasizing that the refund should be granted with interest, in line with the Tribunal's decision.

4. Ultimately, the Court held that since the issue was already settled by a previous decision, there was no need for elaborate reasons to dismiss the appeal. The Court ruled in favor of the assessee and against the revenue, affirming the Tribunal's direction to the Assessing Officer to allow interest under Section 244A and 244(1A) of the Income Tax Act. The Court emphasized that unnecessary litigation should be avoided, supporting the Tribunal's decision.

In conclusion, the High Court dismissed the appeal by the revenue, upholding the Tribunal's decision to allow interest under Section 244A and 244(1A) of the Income Tax Act in favor of the assessee. The judgment reiterated the importance of avoiding unnecessary litigation and adhering to the legal conclusions already established in previous decisions.