9911796707
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Issues:
1. Applicability of the Indian Income Tax Act of 1922 or the Income Tax Act of 1961 to the case. 2. Jurisdiction of civil courts to try the suit. Analysis: The plaintiff filed a suit against the Union of India for the recovery of an amount related to interest on tax refund. The tax liability was created on the plaintiff for the assessment of 1946-47, which was ultimately paid in 1957. The High Court directed the Department to refund the excess tax amount. The plaintiff claimed interest on the refund under s. 66(7) of the Indian I.T. Act, 1922. The Commissioner of Income-tax, however, contended that no interest was payable as the refund was granted within the prescribed period under the I.T. Act, 1961. The main issues before the court were the applicability of the Acts and the jurisdiction of civil courts. The single judge held in favor of the plaintiff regarding the Act of 1922 but dismissed the suit based on lack of jurisdiction. The High Court found that the plaintiff's case was governed by the Income Tax Act of 1961, not the Act of 1922. The court dismissed the appeal, stating that the plaintiff was not entitled to interest on the refund. The court rejected the argument that the Income-tax (Removal of Difficulties) Order, 1962, supported the plaintiff's claim under the old Act. The court emphasized that the claim for interest was not sustainable under the 1961 Act. The court also noted that the plaintiff could not rely on the Order as the claim for refund was made after the commencement of the 1961 Act. Although the single judge had allowed interest from a certain date, the High Court held that the plaintiff was not entitled to any interest on the refund. Consequently, the appeal and the suit were dismissed. The court emphasized that the parties would bear their own costs in the appeal. The judgment clarified the inapplicability of the old Act and the dismissal of the suit based on the lack of entitlement to interest on the refund.
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