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TMI Blog1981 (7) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ised for decision is ultimately the same. The assessee is a public limited company doing business in the manufacture of cement. For the assessment years in question its assessments were completed on certain figures of total income. The assessee had paid certain amounts by way of advance tax and tax deducted at source. Since the amounts thus paid exceeded the amount of tax payable on the basis of the assessments (except for the assessment year 1959-60), the assessee was awarded interest under s. 214 at the time of the completion of assessments in respect of the amounts paid in excess up to the dates of the original assessments. Subsequently, on appeals, the total income of the company was substantially reduced and the tax payable on such total income was also substantially reduced. As a consequence, considerable amounts became repayable to the assessee for all these assessment years including the assessment year 1959-60. The ITO concerned, while passing orders giving effect to the appellate orders of the AAC and the Appellate Tribunal, also granted interest to the assessee on the footing that the reduction in tax payable by the assessee determined as a result of the appeal entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the tax determined as payable. It appears that the department had preferred an appeal to the Tribunal from the order of the AAC which went in its favour. Consequent on the orders of the Appellate Tribunal the assessment was once more revised on June 4, 1968, which brought the total income of the assessee to Rs. 24,64,081. The tax payable on this total income was Rs. 13,42,986 which was still less than the advance tax paid by the assessee. As a consequence of this action the interest figures under s. 214 were suitably revised and the excess interest paid as a result of the revision on November 16, 1966, was recovered from the assessee. Then comes the rectification order dated October 28,1970. By this rectification order the ITO pointed out that the assessee should not have been granted any interest under s. 214 over and above what had already been paid at the time of the original assessment. According to him a sum of Rs. 1,02,711 had been paid in excess to the assessee over and above the amount properly due to him and it is this excess amount which he proceeded to recover by the order under s. 35/s. 154 passed on October 28, 1970. The same is the position in respect of the other y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee under section 18A(5) of the Indian Income-tax Act, 1922/s. 214 of the Income-tax Act, 1961, for the assessment years 1959-60 to 1962-63 was to be determined on the basis of the tax finally determined after giving effect to the appellate orders? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified to hold the rectification effected by the Income-tax Officer under section 35/154 of the Income-tax Act, 1922/1961, was without jurisdiction and invalid ? " In regard to the further rectification effected for the assessment year 1961-62, the Tribunal was of opinion that only the following question of law arose out of the order of the Tribunal : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Income-tax Officer's assumption of jurisdiction u/s. 154 of the Income-tax Act, 1961, for withdrawing the interest of Rs. 1,469 by his order dated April 24, 1971, was not valid in law ?" These are the questions which have been referred to us for decision. In regard to the first question as to the interpretation of s. 18A(5) of the Indian I.T. Act, 1922/s. 214 of the I.T. Act, 1961, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression " regular assessment " in s. 214 has reference to the original assessment made in the case of an assessee by the ITO or whether it will also take in any revision of such assessment made by the said ITO consequent upon appeals, references or revisions. As we have pointed out in the decision in the case of National Agricultural Co-operative Marketing Federation of India Ltd. [1981] 130 ITR 928 (Delhi), referred to earlier, the interpretation of this phrase which is seemingly simple, is really one of great intricacy and of considerable difficulty, on which there has been difference of opinion among the High Courts. Our judgment in that case contains a detailed discussion regarding the various judgments and the differences of opinion and it is unnecessary to elaborate on the same here. Even in the present case, the Tribunal, on its independent consideration of the provision, came to the conclusion that " regular assessment " should mean only the assessment as modified in the light of the appellate or revisional or rectification orders but since there were two decisions which took the view that regular assessment meant only the original assessment, they followed these de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent again is misconceived. We have pointed out that the first and the second revisions of the assessment for 1959-60 were effected in 1966 and 1968. By this time the decisions of the Calcutta High Court in Kooka Sidhwa and Co.'s case [1964] 54 ITR 54 and of the Circuit Bench of the Punjab High Court in the case of Gopi Lai [1967] 65 ITR 477 had already been rendered. That apart, the numerous decisions that were rendered subsequently clearly indicate that the matter was one of controversy and was being agitated at various levels. There is no doubt that the matters came up to the stage of the High Court only much later, but it is not correct to say that there was no controversy of opinion in the matter when the assessments were revised in 1966 and subsequently. The matter is one of interpretation of the provisions and the existence of judicial opinions differing from one another clearly show that the question of interpretation is one of some difficulty and complexity. We, therefore, agree with the Tribunal that this was not a matter which could have been set right by resort to s. 35/s. 154. The third point made by Shri Wazir Singh was that when the orders initially revising the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kshmi Mills Ltd. [1980] 125 ITR 141 and a decision of the Allahabad High Court in CIT v. Raza Buland Sugar Company Ltd. [1980] 123 ITR 185, in support of this proposition. It is not necessary to consider these decisions in detail or to give any concluded opinion in regard to this contention. The short point for consideration is whether it can be said that in passing the refund orders while revising the assessments, the ITO committed a mistake in the sense explained earlier. We are of the opinion that it is difficult to say so. The ITO applied, while making the revision and granting the refunds, the law as interpreted by him at that time. The point at issue being one of doubt and debate, he cannot change that view and proceed against the assessee, by invoking the provisions of s. 35/s. 154, to give effect to a new interpretation which in his opinion now is the correct one. Before concluding we may mention that Shri Harihar Lal raised an objection that the first question cannot be considered to arise out of the order of the Tribunal at the instance of the applicant in view of the decision of the Supreme Court in the case of CIT v. V. Damodaran [1980] 121 ITR 572, but as already men ..... X X X X Extracts X X X X X X X X Extracts X X X X
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