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Issues:
- Whether the assessee is entitled to interest under section 244(1A) of the IT Act, 1961 for the assessment year 1973-74. - Whether the advance-tax paid by the assessee should be considered as payment for the purpose of claiming interest under section 244(1A). - Whether the provisions of section 154 are attracted in this case. - Whether interest under section 244(1A) is due considering the timing of tax payments. Analysis: The departmental appeal was filed against the order of the CIT (A) regarding the assessee's claim for interest under section 244(1A) of the IT Act, 1961 for the assessment year 1973-74. The ITO had made an assessment in January 1977, and the demand raised was adjusted against the advance-tax paid by the assessee. The assessee claimed interest on the refunded amount, which was not allowed initially. The IAC rejected the claim, stating that no payment was made in pursuance of the assessment order. The CIT (A) accepted the assessee's plea, stating that any form of payment could entitle the assessee to interest under section 244(1A). The department contended that the CIT (A) erred in not addressing the objection raised by the IAC regarding the applicability of section 154. The department argued that the claim was based on a debatable view and hence not eligible for interest. It was also argued that since the advance-tax was paid before 1st April 1975, interest could not be allowed. However, the assessee argued that the payment by adjustment should be considered as payment, citing relevant case law. The Tribunal upheld the order of the CIT (A), stating that the payment of tax was made after 1st April 1975, and interest was due as a result of the appellate orders. The Tribunal disagreed with the IAC's interpretation that the tax was paid before the assessment, noting that the nature of the two payments was different. Therefore, the Tribunal concluded that interest under section 244(1A) should be allowed in this case, dismissing the departmental appeal.
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