TaxTMI 
TaxTMI 
2005 (8) TMI 69
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....of the petitioner-company at Rs. 7,93,48,600. The Inspecting Assistant Commissioner determined a refund of Rs. 1,19,78,111 together with the interest at Rs. 31,14,306 under section 214 of the Income-tax Act and the amount of Rs. 4,80,000 was also charged as an interest under section 216. The total amount of refund was computed at Rs. 1,46,12,470 and it appears that part thereof, was adjusted towards the pending tax demands. On July 2, 1985 further order was passed under section 154 of the Income-tax Act rectifying certain mistake in the assessment order and further refund was granted. Finally the Commissioner of Income-tax (Appeals) allowed the appeal partly. Based on the same, the Inspecting Assistant Commissioner by his order dated February 19,1987, passed the assessment order giving effect to the order of the Commissioner of Income-tax (Appeals) and computed the total refund at Rs. 4,87,92,034. There is no dispute that the entire refund amount has either been adjusted towards the pending tax demands or the balance has been paid to the petitioner. The only grievance is with regard to the non-payment of interest on the amount refunded to the petitioner. The assessment order did no....
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....'s case is concerned, the Commissioner of Income-tax ought to have considered the case in view of the changed law and not by applying the law as it stood prior to the amendment of 1985. Mr. Pardiwala has contended that the order of the Commissioner of Income-tax declining to grant such interest suffers from an error apparent on the face of the record. Mr. Pardiwala has contended that the provisions of section 214 as well as section 244(1A) of the Income-tax Act have not been properly and correctly construed by the Commissioner of Income-tax in the aforesaid order dated June 14, 1988, and that he has wrongly construed the same. In support of his submissions, Mr. Pardiwala, referred to and relied upon the Division Bench judgment of our High Court, with regard to the interpretation of section 214 of the Income-tax Act in the case of CIT v. Saswad Mali Sugar Factory Ltd. [2001] 249 ITR 756 (Bom). In that case, the assessment year was 1980-81 and the assessment was completed on July 25, 1983. The assessee had appealed against the same and the appeal was allowed in December, 1987. Based on the same, the assessment order was passed on October 24, 1988, granting refund to the assessee i....
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.... appeal came to be allowed. Therefore, the Amending Act, 1984, would apply to this case. Lastly, a bare reading of section 214(1A) indicates that the said section 214(1A) would apply to all cases where interest becomes payable as a result of an order under section 147 or section 154 or section 250 or Section 254 or section 262 or section 263. Therefore, the Taxation Laws (Amendment) Act, 1984, is applicable to this case and we do not find any merit in the contention of the Department that the said amending Act is not applicable to the facts of this case. Accordingly, the above question is answered in the affirmative, i.e., in favour of the assessee and against the Department." In the aforesaid judgment, this court has very clearly held that the Taxation Laws (Amendment) Act, 1984 is procedural in nature and, therefore, it will apply to all the pending actions, and as far as the assessee in the said case was concerned, the assessment year started from April 1, 1980 and accordingly, this court found that there was nothing wrong in the order granting the interest from April 1, 1980 till the date of the assessment order. Mr. Pardiwala also referred to and relied upon the judgm....
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....er words, so far as the amount of advance tax is concerned, it must be understood to have been paid 'in pursuance of any order of assessment' only on the date of the original order of assessment-and not on the date of actual payment. The reason is obvious, on the day the advance tax amount is paid there is no assessment and, hence, it cannot be said to have been paid 'in pursuance of any order of assessment'. This view was also taken by the Punjab and Haryana High Court in the case of Leader Engineering Works [1989] 178 ITR 529. Interest under sub-section (1A) of section 244 is payable when the tax or penalty paid by an assessee pursuant to an order of assessment has been reduced in appeal or any other proceeding. In such a case an excess amount of tax or penalty paid by the assessee will have to be refunded and the Central Government has to pay interest on the excess amount from the date on which such amount was paid to the date on which the refund was granted. Of course, there can be no question of paying interest both under section 214(1A) and section 244(1A) simultaneously. The rate of interest being the same under both the provisions, there would be no difference in the act....