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TMI Blog1989 (8) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ature was payable till the date of rectification or the entitlement of the assessee to receive interest was confined to the date of assessment first made under section 143(3) of the Act. The answer to this question depends on the interpretation of the expression "regular assessment" finding place in section 214 of the Act. Let us read the section as it stood at the relevant time: "214. (1) The Central Government shall pay simple interest at twelve per cent. per annum on the amount by which the aggregate sum, any instalments of advance tax paid during any financial year in which the.) are payable under sections 207 to 213 exceeds the amount of the tax determined on regular assessment, from the 1st day of April next following the said financial year to the date of regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year during which it is payable by reason of the provisions of section 213, interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of regular assessment: Provided that in respect of any amount refunded on a provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a notice of demand is issued, the assessee is under an obligation to pay the tax demanded and no question can arise of his being compensated by way of interest for any payment made by him in satisfaction of the demand. The compensation is intended only for the period during which there was no obligation to pay the tax, that is, up to the date of the first assessment by the Income-tax Officer. Shri Goswami has, however, referred to Chloride India Ltd. v. CIT [1977] 106 ITR 38, wherein a learned single judge of the Calcutta High Court (Sabyasachi Mukharji J. as his Lordship then was) took the view that regular assessment means the assessment as modified pursuant to appeal, etc. In coming to this decision, reference was made to sections 209 and 210 of the Act and it was pointed out that "regular assessment" of which these sections speak was not confined to the first assessment but would include the assessment made by the Income-tax Officer pursuant to the direction of the appellate authority. This decision of the Calcutta High Court was not approved in Lala Laxmipat Singhania v. CIT [1977] 110 ITR 289 (All). The Division Bench of the Allahabad High Court did not agree with the Calc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the view adopted in this decision, when refund of income-tax, including advance tax paid by the assessee, is to be effected consequent on the appellate order passed by an appellate authority, the refund has to be effected under section 240 ; section 214 has no application in such a case. The same view was reiterated by the Andhra Pradesh High Court in Warner Hindustan Ltd. v. CIT [1988] 171 ITR 224. The Punjab and Haryana High Court in CIT v. Ambala Electric Supply Co. Ltd. [1983] 142 ITR 872, followed the views adopted by the Allahabad and Delhi High Courts. We may lastly refer to a Full Bench decision of the Bombay High Court in CIT v. Carona Sahu Co. Ltd. [1984] 146 ITR 452, in which it was held that the expression "regular assessment" means only the first order of regular assessment and not the last operative order of regular assessment at any given point of time as a result of appellate or revisional proceedings. In this connection, reference was made to section 215 of the Act and it was stated that it is a counterpart of section 214 and its interpretation is of cardinal importance in the interpretation of section 214. It was pointed out that section 215(3) creates an ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, stated that Chapter XVII as it stood at the relevant time contained no provision for refund, but the proviso to sub-section (3) of section 210 as it stood prior to 1963 made provision for refund of advance tax. The Bench was of the view that sub-section (2) must be read in the context of the proviso to section 210(3) as it stood at the relevant time. Where a refund has been made of advance tax in the contingencies provided for by the proviso to section 210(3) as it then stood, and it had been found on regular assessment that the amount of advance tax originally paid was in excess of the tax assessed by the amount refunded or more, interest was payable upon the amount refunded and by virtue of section 214(2), it was payable only up to the date of the refund. The above would show that the Full Bench had considered all aspects of the matter and thereafter came to the conclusion that the expression "regular assessment" in section 214(1) meant the first order of regular assessment passed by the Income-tax Officer and not the last operative order of regular assessment at any point of time passed as a result of appellate or revisional proceedings. We are in respectful agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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