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Issues:
- Appeal by Revenue challenging direction to allow interest to assessee under section 214(2) on excess payment of advance tax. - Interpretation of section 154 for allowing interest under section 214 based on revised total income post appeal. - Application of judicial pronouncements supporting the allowance of interest under section 214(2). - Contention regarding the applicability of section 154 and the decision in ITO vs. Volkart Bros. & Ors. (1971) 82 ITR 50 (SC). - Dispute over the AAC's order directing the ITO to allow interest to the assessee. - Argument by Departmental Representative questioning the AAC's decision and citing lack of clarity on the matter. - Reference to conflicting decisions and absence of a Madhya Pradesh High Court ruling on the issue. - Comparison of decisions by different High Courts regarding the scope of "regular assessment" and interest under section 214. - Justification of the AAC's order to grant interest under section 214(2) and dismissal of Revenue's appeal. Analysis: 1. The appeal before the Appellate Tribunal ITAT Nagpur involved the Revenue contesting the direction to allow interest to the assessee under section 214(2) on excess payment of advance tax post appeal. The dispute centered around the interpretation of section 154 for granting interest based on the revised total income after appeal effect. The assessee sought interest under section 214(2) through an application under section 154, which was rejected by the ITO citing the definition of "regular assessment" and the decision in ITO vs. Volkart Bros. & Ors. (1971) 82 ITR 50 (SC). 2. The AAC, after considering the arguments presented by the ld. counsel for the assessee and the Revenue, directed the ITO to allow interest to the assessee under section 214, relying on judicial pronouncements such as Triplicane Urban Cooperative Society Ltd. vs. CIT (1980) 16 CTR (Mad) 273, Associated Cement Co. Ltd. vs. CIT (1982) 27 CTR (Bom) 210, and National Agricultural Cooperative Marketing Federation of India Ltd. vs. Union of India (1981) 130 ITR 928 (Del). The Revenue, represented by the ld. Departmental Representative, contested the AAC's decision, highlighting the lack of clarity on the applicability of section 154 and the absence of a specific ruling by the Madhya Pradesh High Court on the matter. 3. The Tribunal analyzed the conflicting decisions by different High Courts regarding the scope of "regular assessment" and the entitlement to interest under section 214. It referenced the decision in Binod Mills Co. Ltd. vs. S. A. Kadre, Excess Profit Tax Officer & Ors. (1980) 122 ITR 778 (Bom) and Associated Cement Co. Ltd. vs. CIT (1981) 127 ITR 560 (Bom) to support the allowance of interest up to the date of passing the order giving effect to the appellate orders. The Tribunal concluded that the ITO's failure to grant interest under section 214(2) was a mistake apparent from the record, affirming the AAC's decision and dismissing the Revenue's appeal.
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