TaxTMI 
TaxTMI 
1986 (2) TMI 107
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.... payment of advance tax of Rs. 78,54,000 and tax deducted at source amounting to Rs. 3,473. 4. The assessee follows the previous year ending on 30th September. The original regular assessment was made by the ITO on22-4-1982under section 143(3) of the Act determining total income of the assessee at Rs. 1,35,64,870. On the basis of this assessment and considering the advance tax paid and the tax deducted at source, as reduced by the refund of Rs. 5,69,879 allowed in the provisional assessment made on1-7-1979, the ITO determined the tax payable at Rs. 5,46,170. This regular assessment made by the ITO was challenged in appeal before the first appellate authority. The first appellate authority made the appellate order on31-5-1983. In order to give effect to this appellate order, the ITO made an order on6-8-1983. This appears at pages 1 to 5 of the assessee's paper book. In the ITNS-150A which formed part of this order, the ITO computed the amount of refund payable to the assessee at Rs. 7,17,971 as under : &n....
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....; 7,10,963 ---------------------- ---------------------- &n....
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....83appearing at page 9 of the assessee's paper book. In this order, the ITO held that the assessee's claim that there was a mistake apparent from record for not allowing interest as claim under section 214, while passing an order giving effect to the appellate order, was not acceptable : 'As there are conflicting judgments on this issue'. The application was rejected. 7. This order of his was challenged in appeal before the Commissioner (Appeals). 8. The learned Commissioner (Appeals) was required to consider various grounds taken up by the assessee as per grounds of appeal, the copy of which has been filed along with memorandum of appeal before us. According to the learned counsel for the assessee, he had projected before the learned Commissioner (Appeals) that omission of the ITO to apply a particular provision of law, which was applicable to the facts of the case is a mistake apparent from record covered by the provisions of section154 inview of the ratio of the Supreme Court judgment in the case of M.K. Venkatachalam, ITO v. Bombay Dyeing & Mfg. Co. Ltd. [1958] 34 ITR 143. The learned counsel for the assessee had raised other grounds which in a nut shell project the gri....
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....,971. In determining this amount refundable to the assessee, the ITO had already set off two amounts refunded to the assessee earlier at the time of making a provisional assessment and an order of amendment under section 154 as already mentioned above. The amount actually refundable to the assessee on the basis of the order of the ITO dated6-8-1983was Rs. 14,28,934 and it is only after deduction of the sum of Rs. 7,10,963 refunded on account of provisional assessment and order of amendment that the sum of Rs. 7,17,971 remained refundable. According to him, the assessee was entitled to interest on this amount in the clear cut ratio of the Hon'ble Delhi High Court judgment in the case of National Agricultural Co-operative Marketing Federation of India Ltd. It was contended by him that the learned Commissioner (Appeals) failed to appreciate the legal proposition that even if there were conflict of judicial pronouncements on a particular point of law, the authority working under a particular High Court cannot but follow the judgment of that High Court. The Commissioner (Appeals) was, therefore, in error, according to him, in refusing to give to the assessee the relief as claimed on the....
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....Agricultural Co-operative Marketing Federation of India Ltd. there was a return filed by the assessee showing nil income. On the basis of the assessment raised by the ITO and taking into consideration, the advance tax paid, refund had become payable. In that case, there was no provisional assessment and there was no order of amendment under section 154. Therefore, on the peculiar facts of that case, the Hon'ble Delhi High Court held that the assessee had to be allowed interest on the amount refunded to the assessee on the basis of order made by the ITO on appeal made by the assessee. In order to elaborate this argument, the learned departmental representative specifically projected to us that in the case of the assessee a refund of Rs. 5,69,879 had been allowed at the time of provisional assessment. He further pointed out that a refund of Rs. 1,41,084 has been allowed at the time the order of amendment under section 154 was made by the ITO on29-7-1982. Therefore, according to him, the assessee was not entitled to interest on the balance amount of Rs. 7,17,971. In order to support these contentions, he brought to our notice, the provisions of section 214(1) and 214(2). In this parti....
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....ssessee on provisional assessment and on an order of amendment described above. Therefore, according to him, on the sum of Rs. 7,17,971 which was determined as payable to the assessee by way of refund, interest had to be granted notwithstanding that there had been refund of the two amounts mentioned earlier. To this, he submitted, that the case of Carona Sahu Co. Ltd. was not applicable at all. In other words, he reiterated his main submissions and contended that these had not been met by the revenue and, therefore, the orders of the authorities below be reversed and the ITO be directed to grant interest as claimed by the assessee under section 214. 14. We have given careful consideration to the rival submissions. We have also very carefully perused the authorities cited from both sides. The assessee in the application made on 12-10-1983 had projected to the ITO that there was a mistake apparent from record in the order of the ITO made on 6-8-1983 giving effect to the appellate order because the ITO had not allowed to the assessee interest under section 214/244(1A) in accordance with law laid down by the Delhi High Court in the case of National Agricultural Co-operative Marketin....
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....ar point by the High Court of a State, it is binding on the income-tax authorities in that State and merely because there is some judicial divergence of opinion on that point between some High Courts, it cannot be said that there is still scope for a debate on the point and that, therefore, section 154 is not attracted in the case. Apparently, the ITO had not taken note of this authority, while dealing with the matter. 17. The Hon'bleBombayHigh Court has observed in the case of Siemens India Ltd. that the ITO is clearly bound by the decision of a single Judge or a Division Bench of the Court within whose jurisdiction, he is operating as well as a decision of the Supreme Court. The Court has further clarified that the mere fact that an appeal has been preferred against such decision or is pending can make no difference whatever to the binding nature of that decision, so far as the ITO is concerned. In view of this clear provision of law, about the binding nature of the decision of a High Court upon the ITO, the ITO erred, firstly, in laying down the conditions that he will apply the decision of the Delhi High Court only, if the assessee furnished a bank guarantee to safeguard the....