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TMI Blog2009 (12) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... T The judgment of the court was delivered by 1. K. L. Manjunath J.- The Revenue has come up in this appeal challenging the order passed by the Income-tax Appellate Tribunal, Bangalore Bench in I. T. A. No. 728/Bang/2000 dated March 25, 2004, wherein the Tribunal has confirmed the order passed by the Commissioner of Income-tax (Appeals), Bangalore, dated August 30, 2000, raising the following substantial questions of law: "1. Whether, the appellate authorities were correct in holding that the assessee was entitled to interest under section 244A of the Act on the amount of interest paid under sections 234A, 234B and 234C of the Act which was waived in accordance with the Board notification dated May 23, 1996, issued under section 119 of the Act by the Settlement Commission? 2. Whether, the appellate authorities have jurisdiction to entertain a statutory appeal under the provisions of the Income-tax Act against the intimation passed by the Assessing Officer/Deputy Commissioner of Income-tax declining to grant interest under section 244A of the Act? 2. The facts leading to this case are as hereunder: The assessee is a partnership firm. For the assessment year 1994-95, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dering the background of this case. Accordingly, we reframe the substantial question of law to be answered by us in this appeal as hereunder: "Whether the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal were justified in holding that the assessee is entitled to claim interest under section 244A of the Act when the interest was waived off by the Settlement Commission based on the hardship pleaded by the assessee?" 4. The facts of this case are not in dispute to the following extent that, pursuant to the return filed by the assessee the Assessing Officer has passed an order of assessment. While computing the assessment, interest was levied under sections 234A, 234B and 234C of the Act and that order of assessment has become final since no appeal was preferred against the order of assessment. However, it is not in dispute that the assessee went before the Settlement Commission requesting the Settlement Commission to waive the interest on the ground that the levy of interest would cause hardship to him. Accordingly, the matter was settled by waiving interest levied by the Assessing Officer. Therefore, it is clear that interest was waived at the instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee as a matter of right can claim interest invoking section 244A of the Act has to be considered by this court. 7. Mr. Kulkarni, learned counsel appearing for the assessee relying upon the judgment of the Madras High Court in CIT v. Needle Industries P. Ltd. [1998] 233 ITR 370 contends that the assessee is entitled to claim interest even though interest is waived by the Settlement Commission. He further contends that the judgment of the Madras High Court in Needle Industries' case [1998] 233 ITR 370, has been considered and upheld by the hon'ble Supreme Court in Sandvik Asia Ltd. v. CIT [2006] 280 ITR 643 and he further contends that a similar view is also taken by the Madhya Pradesh High Court in CIT v. Hope Textiles Ltd. [2007] 295 ITR 571. Relying upon these judgments, he requests to dismiss this appeal. 8. Per contra, Sri Seshachala, learned counsel for the Revenue contends that the facts involved in Needle Industries' case [1998] 233 ITR 370 have no application to the facts of this case and he further contends in the Needle Industries' case [1998] 233 ITR 370, the Madras High Court had an occasion to consider the provisions of rule 117A of the Income-tax Rules (for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of rule 117A of the Rules, a Division Bench of the Madras High Court has held that the assessee is entitled to claim interest on refund of the amount. But, in the instant case, the waiver of interest has not been passed by relying upon the circumstance contemplated under rule 117A. In the instant case, by virtue of the order passed by the Settlement Commission based on the request of the assessee interest has been waived and not as a matter of right accrued to the assessee. Therefore, we are of the view that the decision in Needle Industries' case [1998] 233 ITR 370 has no application to the facts and circumstances of this case. 13. It is no doubt true that in Sandvik Asia's case [2006] 280 ITR 643 (SC), the hon'ble Supreme Court considering the case of Needle Industries' case [1998] 233 ITR 370 has affirmed the judgment in Needle Industries' case [1998] 233 ITR 370. But the facts involved in Sandvik Asia's case [2006] 280 ITR 643 (SC) are entirely different. Similarly in the case of Hope Textiles Ltd. [2007] 295 ITR 571 the High Court of Madhya Pradesh had no occasion to consider the question that arises in the present case. Therefore, we are of the view that the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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