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TMI Blog1992 (11) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to be in order and allowed interest from the date of payment of tax to the date of the passing of the order under section 143(3) i.e.,3-9-1979. The assessee also claimed that he got some relief in appeal and as a consequence of which some amount became refundable to him and claimed interest on that refund also. This interest also was granted by the Income-tax Officer. The interest granted under section 244(1A) and the interest granted under section 154 on the amount paid on the exparte assessment together came to Rs. 1,61,854. 2. The Commissioner of Income-tax while scrutinising the order passed by the Income-tax Officer under section 154 came to the conclusion that the grant of interest by the Income-tax Officer was incorrect. In exercise of his powers under section 263, the Commissioner gave a notice to the assessee calling upon him to explain as to why the interest granted under section 154 should not be withdrawn. The assessee objected to the withdrawal of this interest. Considering the order passed by the Income-tax Officer erroneous and caused prejudice to the interests of the Revenue, the Commissioner cancelled the order and directed the Income-tax Officer to recover t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his proposition reliance was placed upon a decision of the Punjab and Haryana High Court in the case of CIT v. Jagadhri Electric Supply Industrial Co. [1983] 140 ITR 490 at page 502. 5. On a careful consideration of the issues involved we are of the opinion that the assessee is entitled to the interest and the Commissioner was not justified in withdrawing the interest allowed to the assessee even though under a petition made under section 154. Section 244(1) provided that : "Where a refund is due to the assessee in pursuance of an order referred to in section 240 and the Assessing Officer does not grant the refund within a period of three months from the end of the month in which such order is passed, the Central Government shall pay to the assessee simple interest at fifteen per cent per annum on the amount of refund due from the date immediately following the expiry of the period of three months aforesaid to the date on which the refund is granted." By Taxation Laws (Amendment) Act, 1975 a new section 244(1A) was introduced with effect from1-10-1975, which provided : "(1A) Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 240 refers to orders passed in appeal or other proceedings under this Act. The expression "other proceedings under this Act" have come for interpretation and the Courts have widely interpreted these words as meaning and perhaps including an order passed under section 146 also. If any authority is needed it can be found in the decision of the Allahabad High Court in the case of Hari Nandan Agarwal (HUF) v. ITO [1986] 159 ITR 816. Now therefore as we mentioned earlier the amount became due to the assessee as a consequence of the order passed under section 146 on9-3-1977. It is not true that the amounts collected by the department were all prior to 31-3-1975 and for that reason it may not be said that the assessee was not entitled to the interest under section 244(1A) but one has to see how the tax was collected in this case. There was a search conducted on the assessee's premises on22-3-1974when certain cash was seized, which was appropriated towards tax under section 132(5) of the Income-tax Act. Another sum of Rs. 90,000 was recovered by the department by issuing garnishee orders. These sums were adjusted against the demands raised and the assessments made under section 144. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner are wrong on facts or are not tenable in law, the Tribunal has no option, but to accept the appeal and to set aside the order of the Commissioner. The Tribunal cannot uphold the order of the Commissioner on any other ground which, in its opinion was available to the Commissioner as well. If the Tribunal is allowed to find out the ground available to the Commissioner to pass an order under section 263(1) of the Act, then it will amount to a sharing of the exclusive jurisdiction vested in the Commissioner, which is not warranted under the Act. It is all the more so, because the Revenue has not been given any right of appeal under the Act against an order of the Commissioner under section 263(1) of the Act. [Emphasis supplied by us] Thus this decision is therefore an authority for the proposition that the Tribunal cannot decide an appeal arising out of an order passed by the Commissioner under section 263 on a ground not referred to or even in the contemplation of the Commissioner. Therefore, this question of payment of taxes before or after31-3-1975not being a ground mentioned by the Commssioner in his order cannot now be called in aid by us to adjudicate upon the vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Karnataka High Court in the case of CIT v. H. V. Mirchandani [1986] 161 ITR 800, on which reliance was placed by the Commissioner, to enforce his view. A careful reading of that judgment would show that the rectification was made in that case not at the instance of the assessee and secondly there was no claim made by the assessee regarding interest. On the other hand, in the case before us, the rectification was made at the instance of the assessee and there was a request to grant interest. Moreover the Bombay High Court has taken a contrary view in the case of CIT v. S.C. Shah [1982] 137 ITR 287 where exactly under similar circumstances as obtaining in our case, the Bombay High Court held that a rectification under section 154 was permissible and such orders were appealable, meaning thereby that if interest was not granted on the refund, an appeal would lie. But the Karnataka High Court declined to follow that view because as in its opinion the expression "reducing a refund" envisaged under section 246(1)(f) presupposed that there should have been already an assessment order, in which refund had been ordered and that refund upon rectification should have been reduce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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