1990 (3) TMI 102 - AT - Income Tax

Advance Tax, Appellate Assistant Commissioner, Appellate Orders, Orders Passed, Regular Assessment, Tax Deducted At Source

Summary

Issues Involved:
1. Admissibility of appeals regarding interest u/s. 244(1A).
2. Quantum of interest due to the assessee under sections 214 and 244(1A).

Issue-wise Detailed Analysis:

1. Admissibility of Appeals Regarding Interest u/s. 244(1A):
The primary issue is whether the CIT(A) erred in entertaining the assessee's appeals regarding the claim for interest under section 244(1A), given that section 246 does not explicitly provide for such appeals. The department contended that the CIT(A) erred in holding that interest under section 244(1A) is admissible for tax paid on self-assessment and from the date of regular assessment, contrary to the provisions of section 244(1A).

The CIT(A) considered the admissibility of such appeals by referring to the decision of the Bombay High Court in CIT v. S.C. Shah and the Delhi Bench of the Tribunal in Oriental Fire & General Insurance Co. Ltd. v. IAC. The CIT(A) concluded that an appeal would be competent since the ITO's refusal to rectify the orders constituted an order under section 154, which is appealable under section 246(1)(f). The Tribunal agreed with this view, affirming that the CIT(A) was justified in admitting the appeals.

2. Quantum of Interest Due to the Assessee:
The second issue revolves around the quantum of interest that should be due to the assessee. The assessee claimed that interest under sections 214 and 244(1A) should be calculated from the dates the taxes were paid to the date the orders giving effect to the appellate order were passed. The CIT(A) framed two questions for decision:
- Whether interest under sections 214/244(1A) should be granted from the 1st April of the relevant year of assessment until the date of actual refund.
- Whether interest under sections 244(1)/244(1A) should be granted on excess tax paid on self-assessment from the date of payment until the issue of refund.

On the first issue, the CIT(A) held against the assessee, stating that the ITO was correct in calculating interest under section 214 only up to the date of regular assessment. However, on the second issue, the CIT(A) held that the assessee would be entitled to interest on the amount of advance-tax and tax paid in self-assessment up to the date of actual refund. The CIT(A) relied on the Delhi High Court's decision in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India, stating that the refund arises only when it is determined upon the conclusion of an assessment.

The CIT(A) directed the ITO to allow interest under section 244(1A) from the date of excess payment to the date of actual refund for both assessment years. The Tribunal agreed with the CIT(A)'s decision, stating that the calculation of interest under section 244(1A) was correct and did not call for any interference. The Tribunal clarified that amounts paid by way of advance-tax and self-assessment tax should be considered for calculating the excess between the tax found payable by the assessee and the tax paid in pursuance of the order of assessment. The Tribunal thus dismissed the departmental appeals, confirming the CIT(A)'s order for both years.