1969 (5) TMI 3 - HC - Income Tax

Whether the provisions of the new IT Act retaking to refund would apply in suppression of the provisions of the old IT Act - Held, yes

Summary

Issues:
1. Applicability of provisions for interest on refund under the Income-tax Act of 1961.
2. Interpretation of Section 297(2)(i) of the Income-tax Act of 1961 regarding refunds.
3. Determination of interest on refund under Section 244(1) of the Income-tax Act of 1961.

Detailed Analysis:
The judgment involved a petition seeking a writ of certiorari to quash a communication from the Commissioner of Income-tax, Lucknow, denying interest on a refund of excess income-tax paid by the petitioner. The petitioner had challenged the assessment order through various appeals and a reference to the High Court, which was decided in the petitioner's favor. The key issue was whether the provisions of the Income-tax Act of 1961 or the previous Act would apply to the refund in question.

The court analyzed Section 297(2)(i) of the Income-tax Act of 1961, which deals with repeals and savings. It was noted that the refund in question fell due after the commencement of the 1961 Act, as determined by the High Court's decision and the subsequent order by the Appellate Tribunal. The court held that the provisions of the new Act regarding refunds would apply, superseding the previous Act.

Another significant aspect of the judgment was the interpretation of Section 244(1) of the Income-tax Act of 1961, which governs the payment of interest on refunds. The petitioner argued that interest should be paid on the excess tax amount based on Section 66(7) of the previous Act. However, the court disagreed, stating that Section 244(1) of the 1961 Act does not provide for interest unless the refund is delayed beyond six months, which was not the case here.

Furthermore, the court emphasized that Section 297(2)(i) of the 1961 Act is a self-contained provision regarding refunds, excluding the applicability of provisions from the previous Act. Therefore, the court concluded that the Commissioner of Income-tax was correct in denying interest on the refund, as the entire matter was governed by the provisions of the 1961 Act. Consequently, the petition was dismissed, with no order as to costs.