9911796707
TMI Blog1985 (10) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Commissioner (Appeals) in which a refund has been determined to be issued to the assessee. The facts in this regard, the rival submissions and our conclusion are set out briefly hereunder. 2. The assessment of the assessee-company for the assessment year 1975-76 was completed on 4-5-1982 under section 143(3) of the Act resulting in demand of Rs. 14,96,887 after adjustment of the advance tax of Rs. 48,40,500. On appeal before the Commissioner (Appeals), the demand got reduced to Rs. 44,99,158 after adjustment of tax deducted at source amounting to Rs. 39,634. While giving effect to the order of the Commissioner (Appeals) by his order dated 2-7-1982 the ITO determined the refund due to the assessee at Rs. 3,41,342. The ITO passed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 214 in respect of the refund determined by him as a result of his order dated 2-7-1982. 3. Shri K.R. Ramamani, the learned advocate for the assessee, made the following submissions in this regard. According to him the Madras High Court in the case of Rayon Traders (P.) Ltd. v. ITO [1980] 126 ITR 135, has set the controversy relating to 'regular assessment' at rest and in favour of the assessee, inasmuch as, it has held "that the order passed by the ITO for giving effect to the AAC's order is an order under section 143 and, therefore, a 'regular assessment' and, accordingly, interest under section 214 was admissible on the refund due, if any, up to the date of that order". He, therefore, submitted that as far as the departmental au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iated Cement Co. Ltd. v. CIT [1981] 127 ITR 560, it was held in that case that interest was allowable up to the date of passing the order giving effect to the appellate order. The Hon'ble Bench further held that if there was a decision on a particular point by the High Court of a State, it was binding on the income-tax authorities in that State and merely because there was some judicial divergence of opinion on that point between some High Courts, it could not be said that there was still scope for a debate on the points and that, therefore, section 154 was not attracted. Accordingly, the Bench held that the mistake in not granting interest was rectifiable under section 154. 4. The submissions made on behalf of the department may be summa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te authorities. In this decision it was held categorically that the liability of the Government to pay interest under section 214 on excess advance tax paid was limited to the period up to the date of the first assessment under section 143 or section 144 of the Act. He also drew our attention to the Calcutta High Court decision in the case of V.R. Sonti v. CIT [1979] 117 ITR 838, and the Madhya Pradesh High Court decision in the case of CIT v. Jagannath Narayan Kutumbik Trust [1983] 144 ITR 526, to highlight the submission that when there was a wide divergence of judicial opinion on a question of law or when two conceivable opinions were possible on it, the matter could not be considered to be apparent from the record and, therefore, outsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be such as to be found out without any controversy or long-drawn out process of reasoning. A decision on a debatable point of law or failure to apply the law to a set of facts, which remain to be investigated, cannot be corrected by way of rectification---T.S. Balram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC). Section 214 requires the ITO to pay simple interest on the excess advance tax on completion of the regular assessment. The question now at issue is, whether an order giving effect to an order of the appellate authority by the ITO is a regular assessment. No doubt the Madras High Court in Rayon Traders (P.) Ltd.'s case has held it to be so. However, there is a wide divergence of judicial opinion in this regard as evidenced by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for interest under section 214 through a rectificatory order under section 154. In view of the two weighty authorities by way of High Court decisions we are unable to follow the decision of the Tribunal in Garware Paints Ltd.'s case. 6. As a matter of fact from the very fact that the decision of the Madras High Court in Rayon Traders (P.) Ltd.'s case has itself been the subject-matter of an appeal for which leave has been granted by the High Court it is quite clear that the issue is not free from doubt. The matter would have been different if the original proceedings in this regard had been the subject-matter of appeal. The question, however, is quite different in that, the appellant has sought a rectification of such an order for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
