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TMI Blog1994 (2) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 214. However, the effect to both those narrative orders was given in the same assessment Form (in ITNS 150) in which total demand raised came to Rs. 8,19,570 comprised of Rs. 2,03,346 for withdrawal of interest under s. 214 paid originally and Rs. 6,16,224 for increase in tax liability. 2. The CIT(A) treated the order for withdrawal of part of interest under s. 214 as an order under s. 154—i.e., for rectification of mistake—and rendered decision on 21st Aug., 1989 dismissing the assessee's appeal. The CIT(A) held that the Assessing Officer had rightly withdrawn part of interest under s. 214 by the order under s. 154 of the Act. 3. The learned C.A. for the assessee giving the background of the case, inter alia, gave the figures of interest under s. 214 originally granted and subsequently computed which gave a difference of the impugned sum of Rs. 2,03,346. He then referred us to the provisions of s. 214 as they stood then and pointed out that s. 214(1A) stood substituted w.e.f. 1st April, 1985. According to him, the substituted s. 214(1A) was prospective in operation and applied for and from asst. yr. 1985-86 only. He submitted that s. 214 as it stood before said amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Full Bench decision of the Hon'ble Gujarat High Court was not at all concerned with the withdrawal of interest under s. 214 in part or in full. He submitted that that decision was an authority only for grant of more interest under s. 214 and it was not an authority for withdrawal of even a part of it. He pointed out that that decision of the Hon'ble Gujarat High Court is a very detailed one and on pages 397 to 406 of the reports (151 ITR) the whole scheme of the relevant provisions of the Act has been considered but there is no mention of the contingency of withdrawal of interest under s. 214 being even considered or envisaged. Referring to the observations on page 430 and 431 of the report (151 ITR) he submitted that the Hon'ble Gujarat High Court Full Bench noted difference between ss. 215 and 214 vis-a-vis the term "regular assessment" and very emphatically urged that the said Full Bench decision of the Hon'ble Gujarat High Court authorised only more interest under s. 214 and did not envisage withdrawal of part or whole of interest under s. 214. 7. As an alternative argument he submitted that even if the Gujarat High Court Full Bench decision in Bardolia Textile Mills is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... became binding and final on the points decided by the jurisdictional High Court and hence after the pronouncement of the Full Bench decision of the Hon'ble Gujarat High Court in the case of Bardolia Textile Mills the point ceased to be debatable in Gujarat. He very strongly supported the orders of the Departmental authorities. 9. At this stage, we requested the learned C.A. for the assessee to indicate whether there were any observations in the Full Bench decision of the Gujarat High Court in Bardolia Textile Mills to the effect that the case of enhancement of total income and hence tax liability would be outside the purview of the ratio decidendi of the said Full Bench decision. The point raised was that though in the actual case decided by the Full Bench there was reduction of total income and tax liability and hence the consequential enhancement of interest payable under s. 214 but the question was whether there were any observations in that Full Bench decision to indicate that the Hon'ble Gujarat High Court wanted to keep outside the purview of that decision the opposite case of enhancement of total income and tax liability by the CIT(A) and consequential reduction in intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hree above mentioned provisions [viz. (i) sub-s. (1A) of s. 214, (ii) proviso below s. 214(1) and (iii) s. 141A] were inserted by the same Act, viz., the Finance Act of 1968 w.e.f. 1st April, 1968. So, the argument is that s. 214(1A) should be applied only when interest under s. 214 has been granted on provisional assessment and the same is to be reduced subsequently consequent upon the completion of regular assessment due to increase in the tax liability on regular assessment as compared to the tax liability as per the provisional assessment under s. 141A. Actually, there is no sound basis for any such presumption. The fact of the matter is that s. 214(1A) clearly authorises reduction of interest under s. 214 "on completion of the regular assessment". 12. This brings us to the aspect of interpretation to be put on the term "regular assessment". The learned C.A. for the assessee is right in mentioning that this term has been viewed differently by different High Courts. The Hon'ble Bombay High Court in CIT vs. Carona Sahu Co. (P) Ltd. has held that it is only the first assessment made under ss. 143(1), 143(3) and 144 and does not include subsequent orders giving effect to appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A) as it stood before 1st April, 1985. Actually, the newly substituted s. 214(1A) w.e.f. 1st April, 1985 in terms talks of increase or reduction of the amount on which interest under s. 214 is payable. So, the newly substituted provision talks of increase as well as reduction of interest under s. 214. True the newly substituted provision is more detailed and enumerates the sections due to which the amount on which interest under s. 214 is payable gets increased or reduced but the really important aspect is that the newly substituted s. 214(1A) covers the cases of increase as well as reduction of interest under s. 214. On the other hand, as we have already noted the s. 214(1A) as it stood before 1st April, 1985 specifically provided for reduction of interest under s. 214. This is the position emerging on comparison and analysis of the original and subsequently substituted s. 214(1A) and much of importance cannot be attached to the aspect that there is no High Court decision approving the reduction of interest under s. 214 prior to asst. yr. 1985-86. This is so because if in the light of the view taken by the Hon'ble Gujarat High Court in the case of Bardolia Textile Mills reduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context of the phraseology of s. 244 and the Hon'ble High Court noted that that provision did not envisage reduction in interest payable to the assessee under s. 244. In the present case, we are concerned with s. 214 and we have already noted that s. 214(1A) as it stood at the relevant time specifically directed reduction of interest under s. 214. 17. The learned C.A.'s reliance on the Hon'ble Delhi High Court decision in the case of CIT vs. Dalmia Cement (Bharat) Ltd. also does not help the assessee. In that decision s. 154 was held inapplicable because the "question whether the orders passed by the ITO to give effect to the appellate orders were regular assessment" was of "some difficulty and complexity and one of doubt and debate" (137 ITR). We have already held that in view of a combined reading of the Hon'ble Gujarat High Court decision in Bardolia Textile Mills and Standard Radiators for the areas and persons coming under the territorial jurisdiction of the Hon'ble Gujarat High Court there was no debate possible after the pronouncement of the decision in Bardolia Textile Mills case, i.e., after 29th Aug., 1984. Therefore, this decision also dose not help the assessee. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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