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of <h1>Revenue must pay compound interest when it unjustifiably delays payment; appellate orders upholding interest on interest affirmed, appeal dismissed</h1> <h3>Commissioner of Income Tax Versus Narendra Doshi</h3> The SC affirmed the Tribunal and HC, holding that the revenue must pay interest on interest where it unjustifiably delayed payment of interest to the ... Liability to pay interest - Whether, the Income tax Appellate Tribunal was justified in law in upholding the order of the Deputy Commissioner of Income-tax (Appeals), Indore, directing to allow interest on interest, when the law points for grant of simple interest only? - HELD THAT:- The Tribunal, whose decision the High Court affirmed, had relied upon the decision of the Gujarat High Court in the case of D.J. Works v. Deputy CIT [1991 (10) TMI 33 - GUJARAT HIGH COURT], which had been followed by the same High Court in Chimanlal S. Patel v. CIT [1993 (10) TMI 20 - GUJARAT HIGH COURT]. These decisions hold that the Revenue is liable to pay interest on the amount of interest which it should have paid to the assessee but has unjustifiably failed to do. The Revenue has not challenged the correctness of the two decisions of the Gujarat High Court. They must, therefore, be bound by the principle laid down therein. Following that principle, the question has, as we find, been rightly answered in the affirmative and in favour of the assessee. The civil appeal is dismissed. The Supreme Court upheld the High Court's decision regarding interest payment on excess income tax, citing previous judgments. The appeal was dismissed with no costs. (Case citation: 2001 (7) TMI 10 - Supreme Court)
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