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TMI Blog1989 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 213, interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of the regular assessment : Provided that in respect of any amount refunded on a provisional assessment under section 141A, no interest shall be paid for any period after the date of such provisional assessment. (1A) Where on completion of the regular assessment the amount on which interest was paid under sub-section (1) has been reduced, the interest shall be reduced accordingly and the excess, if any, paid shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly. (2) On any portion of such amount which is refunded under this Chapter, interest shall be payable only up to the date on which the refund was made." Interest is payable by the Government on the amount of advance tax paid during any financial year in which they are payable if it exceeds the amount of the tax determined on regular assessment from April 1 next following the financial year to the date of the regular assessment. Hence, pertinent question arose as to up to which date such interest would be payable by the Government on the advance t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Assistant Commissioner. Sub-clause (c) of section 246(1) provides for such right of appeal from any order of assessment made under sections 143 and 144. An appeal to the Appellate Tribunal lies from the order of the Commissioner or the Appellate Assistant Commissioner. Under the circumstances, when the original regular assessment made by the Income-tax Officer on appeal is reversed and/or modified by reducing the amount of tax to be payable, then the Income-tax Officer implements the said appellate order. Hence, the question calls for determination as to the amount of interest payable on the sums so refunded whether up to the date of the original order of assessment made by the Income-tax Officer or up to the date when such appellate order has been passed. The learned lawyer on behalf of the appellant, Dr. Debi Pal, by giving an example submitted that if originally an assessment had been made by the Income-tax Officer in a sum of Rs. 10 lakhs which ultimately had been reduced by the appellate authority to 1/4th of the sum so assessed, i.e., a sum of Rs. 2 lakhs, then would it be justifiable not to pay interest on the sums so refunded up to the date when the final assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the only interpretation which could be given to the expression "regular assessment". Under Part "C", in accordance with the provisions of sections 207, 208 and 209, the assessee is under an obligation to pay income-tax computed on the basis of his total income of the previous year in respect of which there has been an assessment by way of regular assessment and the Income-tax Officer, by an order in writing, may require him to pay advance taxes determined in accordance with these provisions of the Act. The Income-tax Officer issued such notice of demand for payment of advance taxes on the total income as computed on the basis of the regular assessment of the previous year. The learned judge very rightly observed that it would create an anomalous position if such an interpretation is given to the expression "regular assessment" by referring to the first assessment. Then, in a given case where regular assessment made by the Income-tax Officer is reversed and considerable reduction had been made and pursuant to such appellate order, the Income-tax Officer has given effect to such modification and/or reduction, in spite of that, the Income-tax Officer would be in a position to deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itial or first assessment. As a consequence the learned court below very rightly set aside and quashed the Commissioner's order. In the case, General Fibre Dealers Ltd. v. ITO [1979] 116 ITR 40 (Cal), Mr. Justice Sabyasachi Mukharji, as he then was, dealt with the question whether, under section 214(1) of the Income-tax Act of 1961, the claim of the petitioner to interest on the amount of difference between the advance tax paid and the tax finally determined pursuant to the direction of the Appellate Assistant Commissioner was tenable in law. Referring to the judgment in the case of Chloride India Ltd. v. CIT [1977] 106 ITR 38 (Cal), he reiterated that "regular assessment" as contemplated under section 214(1) should be the assessment made by the Income-tax Officer initially or the first assessment made by the Income-tax Officer if there is no appeal therefrom, but, in a case where there is an appeal, the order passed by the Income-tax Officer finally to give effect to the direction, if any, of the appellate authority should be the regular assessment. Having regard to the scheme of the Act and the context in which the expression "regular assessment" had been used under section 214 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith interest and for that purpose what was the date of regular assessment and the learned judges were of the view (at page 400) that: "The above contention of the Revenue in the alternative envisages two different meanings to be given to the term 'regular assessment' occurring in section 214(1) of the Act. This contention assumes that in section 214(1), the first reference to regular assessment is to the revised assessment, and the reference to regular assessment immediately following is to the first assessment. Read and understood in that manner, interest will be due up to the date of the first assessment, and the interest will be due on an amount found to be in excess on the basis of the determination of the tax under the revised assessment. It will be difficult to understand the sub-section in this manner for more than one reason. It is not as if the term 'regular assessment' appears in two different sections. It appears in one and the same sub-section. In the sequence in which it appears, it would be quite unreasonable to construe the term in two different senses. The term 'regular assessment' is defined in the statute. Section 2(40) which embodies the definition provides tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequent upon which an obligation to pay such excess arises in law, than to say that such obligation is only to pay up to an earlier date, the date when the Income-tax Officer erroneously determined a higher tax as payable by the assessee. If in a case where the Income-tax Officer makes a correct determination, the assessee gets the benefit of refund with interest immediately, where he makes a mistake on assessment which is revised later, interest must naturally be payable up to the date of such revision. Our attempt is only to show that no circumstances disclosed in the facts justify an approach suggested by the Revenue in regard to the meaning to be assigned to the term 'regular assessment' in section 214(1) of the Act. There is yet another approach that could be made to the controversy. What happens to an assessment by the Income-tax Officer when such assessment is subject to an appeal and pursuant to the appellate decision, the matter is reopened obliging the Income-tax Officer to pass a fresh order ? When he makes a fresh order of assessment, he determines afresh the tax payable by the assessee. It is not as if two assessment orders survive against the assessee then. The f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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