1990 (11) TMI 207 - AT - Income Tax

Summary

Issues Involved:
1. Entitlement to interest under section 244(1A) of the Income-tax Act, 1961.
2. Applicability of section 154 for rectification of mistakes apparent from the record.
3. Binding nature of High Court judgments when stayed by the Supreme Court.

Issue-wise Detailed Analysis:

1. Entitlement to Interest under Section 244(1A):
The assessee company paid advance tax in four installments during the financial year 1981-82. A refund was granted upon assessment, and the assessee applied for interest under section 214. The Assessing Officer denied this, stating the advance tax payments were not in accordance with sections 207 to 212. The CIT(A) directed the Assessing Officer to pay interest under section 214, treating the entire payment as advance tax. The assessee filed another application under section 154, requesting interest under section 244(1A). The Assessing Officer denied this, citing improper advance tax payments and previous rejection of interest under section 214. The CIT(A) overruled this, directing interest payment from the date of regular assessment to the date of refund, relying on the Delhi High Court's decision in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India.

2. Applicability of Section 154 for Rectification:
The Revenue argued that the issue of interest under section 244(1A) was debatable due to the Supreme Court's stay on the Delhi High Court's decision, making section 154 inapplicable. The assessee contended that non-consideration of statutory provisions constitutes a mistake apparent from the record. The CIT(A) had to consider section 244(1A) once a refund was determined due to appellate orders. The Tribunal agreed, stating that the Assessing Officer must consider interest under section 244(1A) when a refund is due, and failure to do so is a rectifiable mistake under section 154.

3. Binding Nature of High Court Judgments Stayed by the Supreme Court:
The Revenue contended that the CIT(A) erred by following a stayed Delhi High Court decision. The assessee argued that the stay only prevents execution but does not nullify the judgment's binding nature. The Tribunal cited multiple decisions, including the Andhra Pradesh High Court in Koduru Venkata Reddy v. LAO, supporting the view that stayed judgments remain binding unless reversed. The Tribunal concluded that the dicta of the Delhi High Court remained binding for subordinate authorities within its jurisdiction, despite the Supreme Court's stay.

Conclusion:
The Tribunal held that the assessee was entitled to interest under section 244(1A) on excess advance tax payments from the date of regular assessment to the date of refund. The CIT(A)'s decision was upheld, and the appeal of the Revenue was dismissed.