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TMI Blog2003 (8) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... 109 CTR (Guj) 438 : (1993) 201 ITR 507 (Guj). He was not competent to either find fault with drafting of Act or dissent from the decision of High Court. 4. That the order of the Dy. CIT(A) and AO is against law and facts of the case." 3. Ground Nos. 1 2 relate to the observation of the Dy. CIT(A) that no appeal under s. 246 had been provided in respect of matters relating to s. 244 of the IT Act. 3.1. We have heard both the parties on this issue. The learned Dy. CIT(A) while passing the impugned order observed at para 3 in the following manner: "3. In the first place, no appeal under s. 246 has been provided in respect of matters relating to s. 244. Therefore, the matter under consideration cannot be agitated in this appeal. On this ground alone, it deserves to be dismissed in limine." However, the learned Dy. CIT(A) had not dismissed the appeal of the assessee in limine. On the contrary, the issue has been decided on merits. Therefore, raising of this issue has made it academic in nature because the learned Dy. CIT(A) although observed that no appeal is maintainable yet he had not dismissed the appeal in limine, on the contrary, decided the appeal of the assessee on m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow are that in this case return was filed by the assessee on 26th Aug., 1985, declaring an income of Rs. 47,200. That return was revised to an income of Rs. 49,620 on 28th Oct., 1986. Protective assessment was made on 19th Feb., 1988, at an income of Rs. 1,67,534 resulting in a demand of Rs. 1,13,163. The learned CIT(A) dismissed the appeal of the assessee vide order dt. 26th Sept., 1988. However, the Tribunal vide its order dt. 7th June, 1991 set aside the order of the learned CIT(A) and restored the issue back to his file. The learned Dy. CIT(A) vide his order dt. 24th Nov., 1995, upheld the protective nature of assessment but allowed a relief on quantum by reducing income by Rs. 1,93,780. The AO gave the appeal effect vide order dt. 28th March, 1994, which resulted in refund of Rs. 24,420. On 14th Dec., 1994, the Tribunal directed assessment to be framed in substantive capacity. The AO on 31st March, 1995, gave further appeal effect to the order dt. 28th March, 1994, resulting in refund of Rs. 53,800 which included interest of Rs. 29,380 under s. 244(1A) along with refund of Rs. 24,420 allowed earlier. Further, appeal effect was given by the AO vide order dt. 18th Nov., 1996, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in sub-s. (1) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted: Provided that where the amount so found to be in excess was paid in instalments, such interest shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted: Provided further that no interest under this sub-section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding. Provided also that where any interest is payable to an assessee under this sub-section, no interest under sub-s. (1) shall be payable to him in respect of the amount so found to be in excess. (2) Where a refund is withheld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en these amounts were set off against the tax demand raised in the assessment order, in other words, the date of the assessment order. (iii) With effect from 1st April, 1985, interest payable under s. 214 will increase or decrease in accordance with the variation in the quantum of the excess payment of tax brought about by orders passed subsequent to the regular assessment as mentioned in sub-s. (1A)." Here, we are concerned with the third conclusion was arrived at by their Lordships. As per this conclusion w.e.f. 1st April, 1985, interest payable under s. 214 will increase or decrease in accordance with the variation in the quantum of the excess payment of tax brought about by orders passed subsequent to the regular assessment as mentioned in sub-s. (1A). In the aforesaid case of Modi Industries Ltd. vs. CIT their Lordship has observed at p. 807 as under: "Interest under sub-s. (1A) of s. 244 is payable when the tax or penalty paid by an assessee pursuant to an order of assessment has been reduced in appeal or any other proceeding. In such a case, an excess amount of tax or penalty paid by the assessee will have to be refunded and the Central Government has to pay interest o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdictional High Court in the case of CIT vs. Hansa Agencies (P) Ltd. (1998) 144 CTR (P H) 66 : (1998) 234 ITR 271 (P H), by following the judgment of the Hon'ble Supreme Court in the case of Modi Industries Ltd. vs. CIT. The Hon'ble High Court of Punjab Haryana held that the assessee was entitled to interest on the entire amount or pre-assessment tax paid and found in excess of regular demand after giving effect to appellate order for the asst. yr. 1976-77 under s. 244(1A) of the IT Act. From the above, it would also be clear that the interest, if any, is required to be paid to the assessee after giving effect to the appellate order. 5.2. As regards to the decision of the Chandigarh Bench of the Tribunal, as relied upon by the learned counsel for the assessee is concerned, the assessment years involved in that case were 1983-84 and 1984-85 i.e., before the amendment which came into effect from 1st April, 1985. It is pertinent to mention here that the Hon'ble Gujarat High Court in the case of CIT vs. Ahmedabad New Cotton Mills Co. Ltd. held that "the interest cannot be withdrawn under s. 244(1A) of the IT Act, even when the order as a result of which refund became payable, is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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