1990 (8) TMI 197 - AT - Income Tax

Summary

Issues:
1. Competency of appeal under sec. 154 and sec. 244(1)(f) to Commissioner of Income-tax (A).
2. Interpretation of sec. 244(1A) regarding admissibility of interest on amounts paid under sections 215 and 216.

Detailed Analysis:
1. The judgment involves the assessee's second appeal against an order rejecting an application under sec. 154 of the Income-tax Act, 1961. The assessing officer allowed interest only on the income-tax refunded, not on the interest paid under sections 215 and 216. The Commissioner of Income-tax (A) dismissed the appeal, stating no appeal lay under sec. 244(1A). The issue was whether the appeal was competent under sec. 154 or sec. 244(1A). The Tribunal held that the order appealed against was under sec. 154, making the appeal competent and should have been decided on merits.

2. The main issue was the interpretation of sec. 244(1A) regarding the admissibility of interest on amounts paid under sections 215 and 216. The assessee claimed interest under sec. 244(1A) on the amount paid as interest. The Tribunal analyzed the conditions under sec. 244(1A) for the award of interest. It concluded that the amount paid after 31-3-1975, in pursuance of an assessment order, and found in excess in appeal qualifies for interest under sec. 244(1A). The Tribunal rejected the revenue's contention that interest was only eligible on the excess of income-tax and penalty actually paid over and above the amount due. It held that the assessee was entitled to interest on the sum paid under sections 215 and 216.

3. The Tribunal discussed the legislative intent behind sec. 244(1A) and highlighted that interest under this section was meant to address the injustice where amounts paid by taxpayers remained blocked due to assessment or appellate proceedings. It emphasized that sec. 244(1A) was an enlargement of sec. 244(1) and interest was payable on the entire refund amount. The Tribunal cited judicial authorities and previous Tribunal judgments to support its interpretation of sec. 244(1A) in granting interest on the excess amount paid by the assessee.

4. In conclusion, the Tribunal allowed the assessee's appeal, directing the assessing officer to grant interest under sec. 244(1A) on the sum paid under sections 215 and 216. The judgment clarified the admissibility of interest under sec. 244(1A) on amounts found in excess in appeal proceedings, emphasizing the legislative intent behind the provision to provide relief to taxpayers in such situations.