1983 (9) TMI 135 - AT - Income Tax

Summary

Issues:
- Interpretation of provisions of section 244(1) and (1A) of the Income-tax Act, 1961 regarding interest on refund of excess tax paid.
- Determining whether self-assessment tax paid by the assessee can be considered as tax paid in pursuance of an order of assessment.
- Analysis of provisions of section 140A(2) in relation to self-assessment tax and regular assessment.

Analysis:
The appeals before the Appellate Tribunal ITAT Hyderabad-A involved the interpretation of provisions of section 244(1) and (1A) of the Income-tax Act, 1961, regarding the payment of interest on the refund of excess tax paid. The dispute arose from orders passed by the Commissioner under section 263 of the Act, questioning the allowance of interest on self-assessment tax paid by the assessee. The Commissioner contended that interest under section 244(1A) was only payable on tax paid in pursuance of an order of assessment. The assessee argued that self-assessment tax paid should be deemed as tax paid in pursuance of an order of assessment, relying on the judgment of the Delhi High Court in a similar context.

The Tribunal considered the provisions of section 244(1) and (1A) which govern the payment of interest on refunds due to the assessee. It analyzed whether the self-assessment tax paid by the assessee could be construed as tax paid in pursuance of an order of assessment. The Tribunal also examined the provisions of section 140A(2), which state that after a regular assessment is made, any amount paid as self-assessment tax shall be deemed to have been paid towards such regular assessment. The Tribunal relied on legal precedents and observed that by deeming self-assessment tax as paid towards regular assessment, it becomes tax paid in pursuance of the order of assessment.

The Tribunal referred to the judgment of the Delhi High Court in a similar case and concluded that the self-assessment tax paid by the assessee, which later became refundable due to appellate decisions, was eligible for interest under section 244(1A). It held that the ITO was justified in allowing interest on excess self-assessment tax paid by the assessee. The Tribunal set aside the orders passed by the Commissioner under section 263 and restored the orders of the ITO. As a result, the appeals filed by the assessee were allowed, affirming the decision in favor of the assessee.