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TMI Blog2016 (2) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... d be adjusted as payment under section 140A in the case of the assessee for the purpose of charging interest?" 2. This question arises in following background: We are concerned with the assessment year 1988-89. There were search in the premises of three sister concerns including the assessee-company. During such search, all the three firms made further disclosures of their income. It was found that the assesses had not paid tax on self assessment under Section 140A of the Income Tax Act, 1961. During the course of the assessment, however, the assessee contended that in case of other two firms, excess tax has been paid and that, therefore, the same is required to be refunded. The assessee, therefore, requested the Assessing Officer to adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were created. In my view, having regard to the overall facts the refunds ultimately created in the other group cases and claimed to have been actually adjusted against the demand in the case of the appellant firm, should be treated as payment u/s. 140A of the I.T. Act for the purpose of charging interest. The Assessing Officer is accordingly directed." 3. Revenue carried the issue in appeal before the Tribunal. The Tribunal, by its judgement dated 12.06.1998 after reproducing the above quoted portion of the order of CIT(Appeals), observed as under: "3. From the aforesaid finding, we find that since it is a matter of three cases of the same group, therefore, for the sake of convenience, the assessee requested to adjust the refunds of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Income Tax Act provides detail provisions for granting interest on refund as well as charging interest on unpaid tax or tax paid after delay. Excess tax paid by one assessee cannot be offset against shortfall of tax of another assessee in order to curtail the interest liability of the debtor. The CIT(Appeals) was conscious that the statute would not permit this. He, however, taking into account peculiar facts of the case granted such relief. In our opinion, the same was wholly impermissible in law. In case of Commissioner of Income Tax vs. Anjum M.H.Ghaswala and ors. reported in 252 ITR page 1, Constitution Bench of Supreme Court held that charging of interest under Section 234A, 234B and 234C of the Act is mandatory. The Court opined ..... X X X X Extracts X X X X X X X X Extracts X X X X
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