TaxTMI 
TaxTMI 
2004 (12) TMI 60
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....bunal, New Delhi, has referred the following questions of law under section 27(1) of the Act for the opinion to this court: "1. Whether the Tribunal was correct in holding that the payments made under section 15B should be deemed to be payment in pursuance of the orders of assessments and will qualify for interest under section 34A(3A) of the Wealth-tax Act in respect of the assessment years 1971-72, 1975-76 to 1977-78? 2. Whether, on the facts and circumstances of the case, the Tribunal was legally correct in holding that interest under section 34A(3A) was allowable on the payment made prior to March 31, 1975, in respect of the assessment year 1971-72?" Briefly stated the facts giving rise to the present references are as follows: In respect of the assessment for the assessment years 1970-71 to 1974-75, the respondent assessee had made certain payments under section 15B of the Act. These payments were made prior to March 31, 1975. The assessments for these four years were completed on March 20, 1979. Against the assessment orders the respondent had preferred appeals and as a result of the appellate orders certain refunds became due to the respondent which are as follows: Asse....
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.... was of the view that the Bombay High Court in the case of CIT v. Carona Sahu Co. Ltd. [1984] 146 ITR 452 [FB] and the Gujarat High Court in the case of Bardolia Textile Mills v. ITO [1985] 151 ITR 389 [FB] had taken a different approach and he preferred to follow those decisions as the matter was from the State of U.P. and did not fall within the jurisdiction of the Delhi High Court. However, the Tribunal by following its earlier order dated November 7, 1986, in respect of the assessment years 1970-71 and 1972-73 to 1974-75 had upheld the claim of the respondent-assessee and had allowed interest on the amount of tax which had been deposited prior to March 31, 1975, as also prior to the assessment order as in its view under section 15B of the Act the amount deposited by way of advance tax is to be treated as amount of tax deposited pursuant to the assessment order. We have heard Sri Shambhoo Chopra, learned standing counsel for the Revenue, and Sri Rithik Upadhyaya, learned counsel appearing for the respondent-assessee. As both the references relate to the same assessee and raise a common questions of law they are being decided by a common judgment and order. Learned standing co....
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.... so found to be in excess was paid in instalments, such interest shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted: Provided further that no interest under this sub-section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding. Provided also that, where any interest is payable to an assessee under this sub-section no interest under sub-section (3) shall be payable to him in respect of the amount so found to be in excess." From a reading of the aforesaid provision, it is seen that simple interest at the rate specified in sub-section (3) is to be paid by the Central Government from the date on which the refund was granted on the amount which has been paid by the assessee after March 31, 1975, in pursuance of any order of assessment or penalty found to be in excess. Section 15B of the Act provides for deposit of tax and interest before the return has been filed. Sub-section (2) provides that any amount paid towards self-assessment shall be deemed to have been paid towards s....
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....h of the Bombay High Court has held that interest is compensatory in character but there is no right to receive interest other than by a right created by statute which depends upon the construction of the statute. It has further held that the regular assessment in sub-sections (1) and (1A) of section 214 of the Act must be read to mean the first order of regular assessment and not the last operative order of regular assessment. If the amount of advance tax paid by the assessee for an assessment year is equal to the tax assessed by the order of first regular assessment no interest is payable. However, if the amount of advance tax paid is greater than the tax assessed by the order of first regular assessment the Government pays, under section 214, interest to the assessee on the excess amount up to the date of the first order of regular assessment. If the amount of advance tax paid is less than the tax assessed by the first order of regular assessment, the assessee pays, under section 215, interest on the amount of the shortfall up to the date of the first order of regular assessment. In the case of Bardolia Textile Mills v. ITO [1985] 151 ITR 389 the Full Bench of the Gujarat High ....
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....75 (which will include tax deducted at source and advance tax to the extent the same has been retained and treated by the Income-tax Officer as payment of tax in discharge of the assessee's tax liability in the assessment order), becomes refundable wholly or in part as a result of any appellate or other order passed, the Central Government will have to pay the assessee interest on the refundable amount under section 244(1A). For the purpose of this section, the amount of advance payment of tax and the amount of tax deducted at source must be treated as payment of income-tax pursuant to an order of assessment on and from the date when these amounts were set off against the tax demand raised in the assessment order, in other words, the date of the assessment order." In the case of K. Govindan and Sons v. CIT [2001] 247 ITR 192 the apex court has held that a first or initial assessment order under section 147 of the Act is a "regular assessment" within the meaning of section 139(8) of the Act which has been the position of law even before the Explanation in section 139(8) was added by amendment and it was only clarificatory in nature. In the case of Vikrant Tyres Ltd. v. First ITO [....