9911796707
TMI Blog1989 (8) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... question to be decided in these appeals is whether, under section 244(1A), the assessee was entitled to get interest on the refund of the amounts paid by it by way of interest under sections 215, 217(1A) and 220(2). The assessee had paid certain amounts of interest under sections 215, 217(1A) and 220(2). Interest is payable under section 215 where the assessee has under-estimated his income liable to tax. Where the advance tax paid by the assessee on the basis of his own estimate is less than 75% of the assessed tax, interest under section 215 is payable upon the amount by which the advance tax paid falls short of the assessed tax. It may so happen that subsequent to the completion of the assessment, the total income determined may get redu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest under section 244(1A) on the amounts refunded to the assessee. He, hence, revised the orders of the ITO under section 263. He directed the ITO to withdraw interest allowed by him under section 244(1A) on the refund of the amounts which had been paid by the assessee by way of interest under sections 215, 217(1A) and 220(2). Being aggrieved by the orders of the CIT, the assessee has come up in appeal before us. The contention of the assessee is that interest under section 244(1A) was very much admissible to it on the refund of the amounts of interests paid by it under sections 215, 217(1A) and 220(2). 4. We have considered the matter carefully. The provisions of section 244 which provide for allowance of interest on refund are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-section (1) shall be payable to him in respect of the amount so found to be in excess. (2) ....................................." Sub-section (1A) was inserted by the Taxation Laws (Amendment) Act, 1975 with effect from 1-10-1975. 5. Whenever refund of any amount becomes due to the assessee and it is not granted within a particular period, sub-section (1) of section 244 mandates payment of interest. Interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was liable to pay as tax or penalty, is the Government required to pay interest. It is thus obvious that interest within the terms of sub-sec. (1A) is not payable in respect of the amounts refunded to the assessee, which amounts had been paid by him by way of interests levied under sections 215, 217(1A) and 220(2). It is only under sub-section (1) that interest is payable on the refund of any amount, whether paid by way of tax or penalty or interest, but within the terms of sub-section (1A) interest is payable only on the refund of the amounts of tax or penalty. 6. The learned authorised representative of the assessee had drawn our attention to the decision of the Hyderabad Bench of the Tribunal in the case of Smt. K. Mahalakshmamma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tand as to how this decision will be of any help in deciding the issue arising before us. The issue before us is whether, under the provisions of section 244(1A), interest is to be allowed only on the refund of amount paid by the assessee by way of tax or penalty or whether interest can also be allowed in respect of the refund of the amount paid by the assessee by way of interest. The decision of the Tribunal cited by the assessee will be of no guidance in this direction. 7. The assessee had also relied on the decision of the Kerala High Court in the case of CIT v. Ambat Echukutty Menon [1988] 173 ITR 581. The question examined by the Kerala High Court in that case was whether on interest under sec. 220(2) paid by the assessee being refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (1A). Under sub-section (1A), interest is to be paid only on such refund which is of tax or penalty. If the refund is of anything else, no interest is payable within the terms of sub-section (1A). Under sub-section (1), interest becomes payable, if the refund is not given within three months from the end of the month in which the order in appeal or any other proceeding, in pursuance of which refund has become due, is passed. This interest is payable on refund of any amount becoming due to the assessee. The amount of refund becoming due to the assessee may be of tax, penalty or interest paid by him. If interest paid by the assessee, say, under sec. 215 or 217(1A) or 220(2), is now required to be refunded to him, interest will b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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