2014 (10) TMI 397

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....here was a dispute as to the period for which interest must be paid on the refundable amount. Ultimately, in relation to the claim of the respondent, the matter went up to the Supreme Court in the form of Civil Appeal No. 284 of 1991. Following its own judgment in Modi Industries Ltd., & Ors v. Commissioner of Income Tax 216 ITR 759, the Supreme Court disposed of the appeal on 30-04-1997 directing that the interest shall be paid from the first day of next previous year till the date of regular assessment. The amount, together with interest has since been paid. The respondent laid a claim for a sum of Rs. 38,90,824/- in the form of interest on interest, for the period between 1985 and 1997. The Income Tax Officer did not accede to the reque....

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....x under Section 214 of the Income Tax Act, 1961 in accordance with the principles laid down in the decision in Modi Industries Ltd. case (supra). No order as to costs. Not only the amount of advance tax treated as not leviable, but also interest of Rs. 21,39,442/- from the date of regular assessment i.e., 01-04-1979 up to the date of payment i.e., 25-09-1982 was paid. The respondent however claimed a sum of Rs. 38,90,824/-. The respondent filed an appeal before the Commissioner and the same was dismissed. In ITA No.735/Hyd/1998 filed by the respondent herein, the Tribunal took note of the judgment of the Supreme Court in CIT v. Narendra Doshi 254 ITR 606 and held that the respondent shall be entitled to be paid interest on interest. There....

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.... the Supreme Court would amount to widening the purport of the order of the Supreme Court. If any clarification in this regard was needed, the respondent ought to have filed an application for that purpose. The Tribunal did not take this aspect into account. Once amounts are paid in compliance with the directions issued by a Court, no inferior forum or Court can modify the direction thereof directly or indirectly. The respondent placed reliance upon the judgment of the Supreme Court in Sandvik Asia Ltd., vs. CIT (2006) 2 SCC 508. The circumstances under which the interest on interest was claimed in that case are similar to those in the instant case. There also the claim of the assessee therein for refund and interest went up to the Supreme....