1982 (11) TMI 73 - AT - Income Tax

High Court, Interest On Excess Advance Tax, Interest Payable By Government, Reference Application, Regular Assessment

Summary

Issues:
1. Maintainability of appeal against order under section 214 of the Income-tax Act, 1961.
2. Applicability of section 214 to revised or rectified assessments.

Analysis:

Issue 1: Maintainability of appeal against order under section 214:
The appeal in question arose from proceedings under section 154 of the Income-tax Act, 1961, concerning interest under section 214. The revenue contended that no appeal should have been entertained by the Commissioner (Appeals) as there is no appeal against an order under section 214. However, the Tribunal found that the circumstances of this case were different from previous decisions. The Tribunal referenced various High Court decisions but concluded that the appeal was maintainable. The Tribunal emphasized that the revenue could not object to the appeal's maintainability at a later stage when it remained silent earlier in the process. The Tribunal also highlighted that the order giving effect to the appellate authority's decision merged with the assessment order, making it appealable.

Issue 2: Applicability of section 214 to revised or rectified assessments:
Regarding the applicability of section 214 to revised or rectified assessments, there was a divergence of opinion among High Courts. The Kerala and Punjab and Haryana High Courts held that interest is not payable as a result of decisions by appellate authorities, limiting it to regular or initial assessments. However, the Delhi High Court took a different stance, holding that section 214 applies even to refunds granted due to revised assessments. The Delhi High Court interpreted the provisions of section 214(2) and 244(1A) to allow interest on refunds up to the date of refund. The Tribunal, following the Delhi High Court's interpretation, upheld the order of the Commissioner (Appeals) and dismissed the revenue's appeal.

In conclusion, the Tribunal upheld the order of the Commissioner (Appeals) on both issues, ruling in favor of the assessee and dismissing the appeal filed by the revenue.