9911796707
TMI Blog1985 (12) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... a clear case of refund, which is due to excess payment of advance-tax on which interest under s. 214 is payable. This fact is verifiable from the records on which there can be no two opinions. In respect of the interest under s. 244(1A), since the refund arose consequent to the order of the appellate authorities the said amount of interest is payable to the assessee. The assessee is also entitled to interest under s. 243 as there was a delay in refund of the amount by delaying the order giving effect to the appellate authorities. He submitted a number of authorities on the issue that his claim is justified and is a rectifiable mistake. On the other hand, Mr. Ruhela for the department filed a copy of this Bench's order in the case of Associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nths . . . (iii) Interest . 130 . . . 1,918 One of the arguments advanced by Mr. Ruhela in regard to interest under s. 214 is that regular assessment means the assessment as was originally passed by the ITO and not an order giving effect to the order passed by the AAC. He had also submitted by placing reliance on the Tribunal's order filed by him, for the proposition that rectification proceedings are not to be resorted to in a matter where there are divergent views. Sec. 214 reads as under: "214. (1) The Central Government shall pay simple interest at fifteen per cent of advance tax paid during any financial year in which they are payable under sections 207 to 213 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund did not consider the interest element at all. Since the ITO did not consider the interest, the assessee made an application under s. 154, which in reproduced above. The question that requires answer is whether under such circumstances the assessee can claim the interest or not? This question was considered by their Lordships of the Delhi High Court in the case of National Agricultural Co-operative Marketing Federation of India Ltd. Their Lordships were of the view that a regular assessment would not only include the original regular assessment as is normally or popularly understood, but it would also include the revised regular assessment where on a re-computation in pursuance of a direction of a superior authority a reduction of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d had been made. Even reading s. 214 as has been amended with effect of 1st April, 1985 the interest should be increased or reduced accordingly consequent to the appellate order and that if excess interest had been paid the same would be recovered. This impliedly means that if the interest has to be increased consequent to appellate order, then such additional interest is payable by the Government to the assessee. 3. In respect of interest under s. 244(1A) according to their Lordships of the Delhi High Court once all taxes paid including advance tax were adjusted consequent to the assessment made then the separate character such as advance tax or wealth assessment tax no longer exist but they are to be treated as tax paid as consequent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year and is given credit for at time of the regular assessment. This means that when the regular assessment is made in the first instance the advance tax paid earlier is treated as having been paid in pursuance of the regular assessment and in satisfaction thereof. Thus, the advance tax paid earlier will get converted into a payment on the date of the initial assessment of the tax due for the assessment year. Carrying this fiction to its logical extent the assessee must be held entitled to interest of the amount of the advance tax also to the extent it is found refundable from the date of the excess payment right upto the date of actual refund. In either view of the matter, an assessee placed in the circumstances in which he is placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ints Ltd. (1984) 7 ITD 445 (Bom) allow the appeals of the assessee in respect of interest under ss. 214 and 244(1A) and in s. 154 proceedings as he had not at all considered the same while arising the appeal effect, partly in respect of interest under s. 243. The case law relied upon by the Department especially of the Tribunals order, supra, would not apply to the facts of the case as in that case the ITO had granted refund of some amount and under rectification proceedings the assessee claimed some more interest and the Department had withdrawn part of the interest already paid to the assessee. The claim of the assessee as well as the claim of the Department was negatived on the ground that rectification does not permit re-thinking and re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
