TaxTMI 
TaxTMI 
2010 (9) TMI 382
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.... A summary of the somewhat elaborate facts will be necessary to be noticed at the outset: For the assessment year 1991-92, the respondent-assessee filed its return of income onDecember 31, 1992, showing transport subsidy received by it as taxable income. However, in the note below the computation of income it was mentioned by the assessee that "transport subsidy is not a revenue receipt, it is a capital receipt". The assessee paid the income-tax due on the returned income. Thereafter, the return was processed and the assessment was completed onMay 16, 1994, under the provisions of section 143(3) of the Act. At no stage of the assessment proceeding any objection was raised by the respondent-assessee to the effect that the transport s....
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....toDecember 6, 1994. In the said notice it was mentioned that as in the return of income filed the taxable income was not computed by the assessee after deducting the transport subsidy, it is the assessee who was responsible for the delay in grant of refund and, therefore, was not entitled to interest on the refunded amount. The aforesaid proceeding under section 263 of the Act was subsequently dropped by the learned Commissioner and, instead, the respondent-assessee by notice datedFebruary 24, 1999. The said rectification proceeding was decided by the Assessing Officer by an order datedMarch 9, 1999, modifying the period for which the interest was payable to the assessee on the refunded amount. The assessee being aggrieved filed an appeal b....
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..... 7. We have heard Mr. U. Bhuyan, learned counsel for the appellant and Dr.A. K. Saraf, learned senior counsel appearing for the respondent-assessee. 8. Mr. Bhuyan, learned counsel for the appellant, has contended that in the present case the respondent-assessee had voluntarily included the amount received on account of transport subsidy as taxable income. On the said basis the assessment was made. At no point of time in the course of the assessment proceeding the assessee had taken the stand that the amount received on account of transport subsidy is not taxable. The aforesaid issue was raised by the assessee only in the appeal filed before the learned Commissioner of Income-tax (Appeals) which was disposed of by the order datedOc....
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.... Asia Ltd. v. CIT [2006] 280 ITR 643 Dr. Saraf has urged that there is a compensatory element in the interest that is awardable under section 244A of the Act and that such interest seeks to mitigate the hardship caused to the assessee on account of wrongful levy and collection of tax. A decision of the Punjab and Haryana High Court in National Horticulture Board v. Union of India [2002] 253 ITR 12 has also been relied upon to contend that interest on refund is automatic and consequential and does not depend on initiation of a proceeding for refund or on raising a claim for refund, as the case may be. 10. We have considered the rival submissions advanced on behalf of the parties. The relevant provisions of the Act, keeping in mind th....
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....t is both significant and conspicuous. To read the same only to situations covered by sections 238 and 239 of the Act which contemplates a claim for refund to be made in the situations specified therein would be against the scheme under the Act. The expression "proceeding" referred to in sub-section (2), more reasonably, would mean any proceeding as a result of which refund has become due. Viewed from the aforesaid perspective the expression "proceeding" in sub-section (2) may take within its ambit an appeal proceeding consequential to which refund may have become due. Our above view would find some support from the decision of thePunjaband Haryana High Court in National Horticulture Board [2002] 253 ITR 12. In the said case, the assessment....