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TMI Blog1987 (7) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India [1981] 130 ITR 928. The department relied on the orders of the authorities below. 2. After carefully considering the submissions, we are of the view that the claim of the assessee is reasonable and should be allowed. The provisions of section 140A (2) clearly provides that after a regular assessment under section 143 or 144 has been made, any amount paid under sub-section (1) shall be deemed to have been paid towards such regular assessment. Section 244(IA) talks of interest payable as a consequence of refund that has been granted to the assessee in pursuance of an order of assessment. Therefore, reading of the provisions of the above sections, the claim of the assessee has only to be allowed. The Delhi High Court in the case of National Agricultural Co-operative Marketing Federation of India Ltd. have made categorical observation that since as a consequence of an assessment made, the tax that are paid as advance tax has to be treated as amounts paid as a consequence of an assessment. Therefore, we allow this appeal of the assessee. Per Shri S. S. Mehra, Judicial member - I have the benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference of opinion the matter is being placed before the Hon'ble President for proceeding in the matter in the light of the above section. The difference of opinion is as under : "Whether on the facts and in the circumstances of the case the assessee was entitled to interest u/s 244(IA) of the Act on the refund due out of the self-assessment tax paid ?" THIRD MEMBER ORDER Per Dr. S. Narayanan, Vice President (WZ) - A difference of opinion having arisen between the Members, who originally heard this appeal, the, matter has come to be referred to me by the President under section 255(4). The point of difference is as under : "Whether on the facts and in the circumstances of the case, the assessee was entitled to interest u/s. 244(IA) of the Act on the refund due out of self-assessment tax paid ?" 2. The assessee is a Pvt. Ltd. Company. The assessment, for this year was completed on18-9-1978on a total income of Rs. 3,20,630. The assessee had made the following payments as self-assessment tax (under sec. 140A) : Date Amount paid 29-12-1975 Rs. 53,107 19-7-1977 Rs. 75,000 After the assessment was finalised on18- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be, under this Act, the Central Govt. shall pay to such assessee simple interest at the rate specified in sub section (1) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted." The further points made by the Commissioner (A) were as follows : (i) The term "other proceeding" found in sec 240 was comprehensive enough to cover the proceedings under sec. 154 also (Sec. 240 provides that "where as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the ITO shall, except as otherwise provided in the Act, refund the amount to the assessee without his having to make any claim in that behalf). (ii) The contention that interest on refund cannot be allowed because payments were made under sec. 140A and not in pursuance of a regular assessment, cannot be accepted fully. Out of the refund of Rs. 66,800 issued on26-3-1983, Rs. 5000 was in respect of a payment made in March 1980. That was in pursuance of an order of regular assessment. Hence interest on Rs. 5000 had to be allowed from the date of payment to the date of refund, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sec. 140-A (2) it had to be taken as a payment made in presence of a regular assessment. Sec. 140-A (2) provides that after a regular assessment under section 143 or sec. 144 has been made any amount paid under sec. 140-A (1) (self-assessment tax) shall be deemed to have been paid towards such regular assessment. (b) Sec. 244(IA) read with sec. 140-A (2) authorised payment of interest on the self-assessment tax paid by the assessee. (c) The above position was in line with the decision in National Agricultural Co-operative Marketing Federation of India Ltd.'s case. The assessee's appeal would, therefore, succeed. 7. The learned Judicial Member, however, disagreed. According to him, the Commissioner (A) was correct in denying interest on the self-assessment tax paid. He made the following points in his order : (a) Sec. 244(IA) is a special section dealing with a situation arising out of sec. 240 of the Act. Refund arose here on account of payment of self-assessment tax. There was no dispute on this. The refund was not out of any amount paid by the assessee in pursuance of an order of assessment or penalty. With such king of refunds, section 244(IA) was not concerned. (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovered from an assessee as advance-tax in pursuance of Chapter XVII shall be treated as a payment of tax in respect of the previous year relevant for the assessment year concerned and credit therefor shall be given to the assessee in the regular assessment. The point stressed by Shri Butani in this regard is that when one compares the language of section 219 with that of section 140-A (2), it would be seen that the position stated by section 140-A (2) is even clearer and expressed in stronger language. In other words, applying the ratio of the National Agricultural Co-operative Marketing Federation of India Ltd.'s case, the assessee's claim here should succeed without doubt. No doubt, as the learned judicial Member has stated in his order it bears the character of the self-assessment tax up to the completion of the assessment, but only up to that stage. Thereafter, it loses that identity and in terms of section 140-A (2) it cannot but he looked upon as tax paid "towards such regular assessment". Interest under section 244(IA) was, therefore, rightly allowable on Rs. 61,800 also. 10. Shri B. K. Haldar, Departmental Representative, placed strong reliance on the orders of the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t directly in controversy the matter. The observation of the Gujarat High Court in Barodlia Textile Mills' case could hence be looked upon as obiter dicta and to that extent they do have a persuasive effect. 13. According to the departmental representative National Agricultural Co-operative Marketing Federation of India's Ltd.'s case is no longer operative in rem, so to speak, because of the interim stay order of the Supreme Court. I am unable to accept this position as correct. The stay Order affects only the parties to the dispute before the Supreme Court. The ratio of the judgment in National Agricultural Co-operative Marketing Federation of India Ltd.'s case being that of the jurisdictional High Court could still bind the subordinate Tribunals functioning in the Union territory of Delhi. There is no getting away from this. Applying the ratio of the National Agricultural Co-operative Marketing Federation of India Ltd.'s case, there can be no room for holding that self-assessment tax is not covered by section 244(IA). When that section is read with section 140A(2) it has to be held in the light of the National Agricultural Co-operative Marketing Federation of India Ltd.'s case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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