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TMI Blog2015 (11) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 1997-98. 2. In appeal, the assessee has raised the following grounds: Aggrieved by the order passed by the Commissioner of Income-tax (OSD), Pune [hereinafter referred to as 'the learned CIT(A)'], under section 250 of the Income-tax Act, 1961 ('Act') and based on the facts and circumstances of the case, Sandvik Asia Limited [hereinafter referred to as 'the Appellant'] respectfully submits that the learned CIT(A) erred in disposing the appeal of the Appellant, on the following grounds, which are independent of and without prejudice to one another. 1. Order passed by the Assessing Officer not being an appeal-able order. The learned CIT(A) has erred in law in observing that the Order Giving Effect passed by the Assessing Officer, incorrectly computing interest under section 244A, is not an appeal-able order and thus dismissing ground numbers (2) to (6) of the impugned appeal. The Appellant prays that the Order Giving Effect passed by the Assessing Officer be considered as an appeal-able order and ground numbers (2) to (6) be disposed-off by the Hon'ble Income Tax Appellate Tribunal on their merits. 2. Excess interest collected u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l according to law. 3. Shri J.D. Mistri appearing on behalf of the assessee submitted, that the Commissioner of Income Tax (Appeals) has erred in holding that consequent to order giving effect passed by the Assessing Officer resulting in payment of interest u/s. 244A of the Income Tax Act, 1961 (herein after referred to as the Act ) is not an appealable order. The ld. AR placed reliance on the decision of Hon'ble Bombay High Court in the case of Caltex Oil Refining (India) Ltd. Vs. CIT reported as 202 ITR 375 (Bom), wherein the Hon'ble High Court while dealing with the provisions of section 214 has held that it is an appealable order. The ld. AR submitted that the provisions of section 244A and the provisions of section 214 of the Act, both relate to the payment of interest to the assessee. The ld. AR further pointed out that the decision of Hon'ble Bombay High Court has been followed in the cases of Godfrey Philips India Ltd. Vs. CIT reported as 206 ITR 23, Phalton Sugar Works Limited Vs. CIT reported as 215 ITR 582 and Phalton Sugar Works Limited Vs. Commissioner of Income Tax reported as 216 ITR 479 and various other decisions. 4. On the other hand Shri Dhe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIT v. Wesman Engg. Co. P. Ltd. [1991] 188 ITR 327, where also a similar expression used in section 195(2) of the Act came up for interpretation and the Supreme Court held that denial of the liability will also include denial of partial liability or dispute in regard to the quantum. In our opinion, the controversy regarding interest under section 214 is not covered by the first part of clause (c). It may, however, fall in the second part which provides for an appeal against an order of assessment under sub-section (3) of section 143 of the Act. The only ground under which such an objection may fall is objection to the amount of tax determined . Now, here again the question arises whether interest under section 214 is a part of assessment and even if it be so, can it be said to be tax determined in the year of assessment for the purpose of appeal under clause (c) of section 246. So far as the first part is concerned, we do not find much difficulty in view of the decision of the Supreme Court in M. Chockalingam and M. Meyyappan v. CIT [1963] 48 ITR (SC) 34. In this case the power of rectification was the subject-matter of scrutiny by the Supreme Court. By an order of rectificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble against an order refusing to grant interest u/s. 244 (IA) of the Act. The relevant extract of the findings of the Hon'ble High Court are as under: 9. Aggrieved by the order omitting to grant interest the assessee preferred an appeal which was dismissed by an order dated 29th March, 1996 by the CIT [Appeal] holding that : an appeal for claiming interest u/s. 244[1A] of the Act is not entertainable in a case where the order giving the appeal effect itself is not being challenged on any ground. However, it is noted that the refund has not arisen as a result of giving of appeal effect. The refund results because of adjustment of certain earlier refunds in earlier years. In such circumstances, in my opinion, the ground of appeal is not acceptable. 10. It is against this order dated 29th March, 1996 that an appeal was preferred by the assessee before the learned tribunal which resulted in the impugned order directing the Assessing Officer to allow interest in accordance with law. 11. We are unable to see how can it be said that the appeal preferred by the assessee which was dismissed by the order dated 29th March, 1996 was not an appeal against an order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the facts and circumstances of the case. 13. In any event, the views taken by the Madras High Court and the Bombay High Court are, according to us, logical and reasonable. In the case of CIT vs. T. V. Sundaram Iyengar Sons Ltd., the Madras High Court answered the question as follows page 534 of 236 ITR): Therefore, we are of the view that the interest on the refund is really a part of the refund and interest and refund are not two different things. When the Income-tax Officer has passed the order under section 154 of the Act without granting interest due to the assessee under section 244[1A] of the Act, he has reduced the refund due to the assessee. We are not able to accept the view of the Karnataka High Court that clause [f] of sub-section [1] of section 246 should be limited only to the case where the refund was granted earlier but was reduced by an order passed under section 154 of the Act. Since we are of the view that the interest forms part of the refund and where the interest is not granted in an order passed under section 154 of the Act, the order in substance and effect meant that the Income-tax Officer has passed an order under section 154 of the Act re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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