9911796707
TMI Blog1984 (7) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 1974-75. The assessment was originally completed on 20-9-1977 determining the total income at Rs. 2,87,360. The assessment was revised under section 155 as well as under section 154 of the Act. However, this is not relevant for the purpose of this appeal. The Commissioner (Appeals) decided the assessee's appeal by his order dated 18-3-1980. The effect was given to the appellate order of the Commissioner (Appeals) by the ITO vide his order dated 31-3-1980. As a result of latter order of the ITO, the assessee's total income stands determined at Rs. 45,042 only. This has resulted in a refund of Rs. 1,34,460. The ITO has allowed interest of Rs. 28,331 under section 214 and of Rs. 2,960 under section 244(1A). 2. Being, prima facie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court has held in a number of cases, including CIT v. Vegetable Products Ltd. [1973] 88 ITR 192, that where two views are reasonably possible, the one in favour of the taxpayer should be adopted. On merits, it is pointed out that the Calcutta High Court has, in its decisions in the cases of Chloride India Ltd. v. CIT [1977] 106 ITR 38 and General Fibre Dealers v. ITO [1979] 116 ITR 40 and the Madras High Court in its decisions in the cases of CIT v. Rajalakshmi Mills Ltd. [1980] 125 ITR 141 and Rayon Traders (P.) Ltd. v. ITO [1980] 126 ITR 135 have held that an assessee is entitled to interest on refunds due as a result of appellate orders. Our attention is also invited to the fact that special leave petition filed on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mean that the law has been laid down by the Supreme Court in terms of article 141 of the Constitution of India, particularly when there is a Bombay High Court's decision squarely covering the issue. It is not permissible to draw an inference from the fact of rejection of the special leave petition and not apply the Bombay High Court's decision. 5. We have heard the parties. The interest has been allowed to the assessee for the first time on 31-3-1980, i.e., when the ITO has given effect to the order of the Commissioner (Appeals). It is this order, which is the subject-matter of appeal. This order has, admittedly, not been a subject-matter of appeal. In the circumstances, the question of its merger so as to exclude the jurisdiction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8] 114 ITR 654, where it is observed at page 663 that the High Court's order discharging the rule nisi on an identical issue in the assessee's own case does not prevent the Court to consider this question when the matter is argued at length by both the sides. Accordingly, we uphold the order of the Commissioner, directing the ITO to withdraw the interest wrongly allowed under section 214. 7. The position regarding allowance of interest under section 244(1A) is materially different. The Bombay High Court's above decision does not cover the issue. On going through the provisions of section 244(1A), we find that the interest under section 244(1A) was rightly allowed to the assessee. Accordingly, we modify the order of the Commissioner and di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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