1967 (1) TMI 20

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.... 31, 1946, there was a controversy as to the precise process of computation which was the subject-matter of a reference in S. V. P. N. Sithambara Nadar & Sons v. Commissioner of Income-tax. It was there decided that the petitioner was for purposes of the Excess Profits Tax Act, 1940, entitled to carry forward a total deficiency of Rs. 48,389 as at the end of the period, January 31, 1940, to January 30, 1941. The particular reference to this court itself, however, covered only the period January 31, 1941, to January 30, 1942. In view of the reduction in the assessment for that period the petitioner was, as a result, allowed refund for that period with interest. The petitioner claims that it is entitled to interest on the refund for each of t....

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....al under the provisions of the Income-tax Act. Section 21 attracts section 66 of the Income-tax Act among its other provisions. Section 66(7) is to the effect that, notwithstanding that a reference has been made under that section, income-tax should be paid in accordance with the assessment made in the case. The proviso to this sub-section reads : "Provided that, if the amount of an assessment is reduced as a result of such reference, the amount overpaid shall be refunded with such interest as the Commissioner may allow unless the High Court, on intimation given by the Commissioner within thirty days of the receipt of the result of such reference that he intends to ask for leave to appeal to the Supreme Court, makes an order authorising th....

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.... income chargeable to tax and in consequence a refund of the overpaid amount of tax becomes due. When such a refund is made it has to be made with interest, the quantum of which is left to the discretion of the Commissioner. The refund with interest is made applicable by the proviso, unless of course the High Court, which answered the reference and to which the Commissioner of Income-tax within the prescribed period intimates his intention to ask for leave to appeal, makes an order authorising him to postpone payment of such refund until the disposal of the appeal by the Supreme Court. It is clear, therefore, that both the substantive provision in sub-section (7) of section 66 and the proviso thereto deal with the same assessment which form....

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....in this that the Act itself will be applicable only to that period and not beyond. We think that the analogy of the carry-forward of unabsorbed loss and set-off thereof under section 24 will be apposite. If, for instance, on a reference relating to a particular assessment year this court in a reference settles certain principles by its answers, as a result of which in that assessment year a certain amount is determined as the loss entitled to be carried forward and the loss so carried forward is absorbed by the profits of certain subsequent years, it can hardly be said in such a case that the carry-forward and set-off of refunds, if any, is as a result of the reference itself. The reference is confined to a particular assessment year, or ye....