1982 (9) TMI 47 - HC - Income Tax

Summary

Issues:
1. Entitlement to interest under section 214(1) of the Income Tax Act on reduced or deleted assessable income.
2. Applicability of section 214(1) in the context of subsequent assessments made as a result of an order passed in appeal.

Analysis:
Issue 1: The case involved a dispute regarding the entitlement of the assessee to claim interest under section 214(1) of the Income Tax Act on the amount refundable due to a reduction in assessable income as a result of an appeal. The Revenue contended that interest is payable only on the amount refundable from the first original assessment made by the Income Tax Officer (ITO). The assessee argued that subsequent assessments made following an appellate order also fall under the definition of "regular assessment." The High Court noted conflicting opinions among different High Courts on this issue. Citing various judgments, the court held that interest is determined based on the date of the first or original assessment by the ITO, not the date of the order resulting from an appeal. The court returned the answer in favor of the Revenue, following precedent and decisions from other High Courts.

Issue 2: The second question raised was related to the absence of a provision for appeal against an order under section 214(1) of the Income Tax Act. The Tribunal had sustained the Appellate Assistant Commissioner's order passed in appeal against an application under section 154, stating that no amendment was involved. However, due to the court's decision on the first issue, it was deemed unnecessary to address the merits of the second question, and thus, it remained unanswered. The court concluded the judgment by stating that no costs were to be awarded in the circumstances.

The judgment was delivered by Prem Chand Jain J., with S. P. Goyal J. in agreement. The court extensively analyzed the legal provisions, precedents, and conflicting opinions to resolve the issues raised in the case, ultimately ruling in favor of the Revenue regarding the entitlement to interest under section 214(1) of the Income Tax Act.