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TMI Blog1990 (3) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... is admissible from the date of regular assessment, even though section 244(1A) lays down that interest is payable from the date on which any amount is paid in pursuance of an order of assessment or penalty. Objection is taken to the CIT(A)'s order granting interest u/s. 244(1A) in respect of a sum of Rs. 22,780 from 1-7-1982 and finally it is argued that the CIT(A) erred in directing the ITO to allow interest u/s. 244(1A) for the entire period without considering the provisions of the second proviso to section 244(1A) of the Act. Certain basic facts may be stated. 2. We are concerned with the assessment years 1979-80 and 1981-82. For the assessment year 1979-80, the ITO gave effect to the appellate order on 22-12-1984 and worked out the refund at Rs. 92,675. Such refund included interest under sec. 214 amounting to Rs. 18,135. Such interest was calculated up to the date of regular assessment, i.e., 30-6-1982, whereas the assessee claimed that interest should have been calculated up to 22-12-1984 which was the date on which the ITO gave effect to the appellate order. By a letter dated 23-8-1985, the assessee requested for rectification of the order calculating interest which, acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as orders u/s. 154. This is so because the assessee had in two letters dated 4-1-1985 and 23-8-1985 had specifically requested for rectification of mistake apparent from record in the computation of interest under sections 214/244(1A) and it was in response to this request of the assessee that the ITO had written the abovementioned letters which, therefore, in the context of the facts narrated, have to be treated as orders u/s. 154 and such orders are appealable orders and the CIT (Appeals), in our opinion, was fully justified in admitting the appeals against these orders. We find support for this view in the decision of the Bombay High Court in S.C. Shah's case. 5. The next issue for consideration is as to the quantum of interest that should be due to the assessee. The assessee claimed that for considering the calculation of interest under sections 214 and 244(1A), the advance-tax paid, self-assessment tax paid and tax paid on regular assessment should all be adjusted against the tax found to be payable in accordance with the appellate order and interest on such refund under section 214 as well as under sec. 244(1A) should be calculated from the dates on which such t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantum of the refund due as under : " 16. According to the appellant, interest u/s. 244(1A) should have been granted up to the date of refund not only on advance tax found to have been paid in excess but also regular tax paid in pursuance of first assessment. Similarly, for AY 1981-82, it is the appellant's plea that such interest should have been granted with reference to tax paid on self-assessment and that adjusted against refund for AY 1980-81. In my opinion, such plea of the appellant is correct and will need to be accepted. What is relevant is that there should have been occurred an event which brings about the circumstance of determining the tax paid in excess. That event, for the purposes of section 244(1A) of the I.T. Act, 1961 is concerned with any amount taken to have been paid after 31-3-1975. If such amount as paid after that date is found to be in excess, as a result of appellate order, interest under this section will become due on the refund arising when giving effect to such appellate order. Therefore, advance tax, tax deducted at source as well as tax adjusted against refund of earlier year will all have the characteristic of representing the paid. Once this is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975, 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-section (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 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." 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