TaxTMI 
TaxTMI 
1994 (6) TMI 14
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....der section 154 of the Act and that the order passed under section 154 of the Act would not be covered by the phrase "other proceedings" contemplated under section 240 of the Act. It is the say of the petitioner that consequent to the orders under section 154 of the Act, a refund of Rs. 11,376 became due to the petitioner for the assessment year. 1975-76 and for the assessment year 1977-78 the petitioner got a refund amount of Rs. 2,452. Both these refunds were ordered to be adjusted against the outstanding demand of assessment year 1974-75. The petitioner claimed interest under section 244(1A) by her application dated November 7, 1981, on the amounts of refund granted to her. That application was rejected by the Income-tax Officer. The ....
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.... a rectification order under section 154 of the Act is passed, sections 240 and 244 would not be applicable particularly in view of the fact that the refund order passed by the Income-tax Officer is under section 154(5) of the Act and it cannot be said to be an order passed in an appeal or other proceedings. For appreciating the rival contentions raised by learned counsel for the parties, it would be necessary to refer to the relevant provisions under Chapter XIX pertaining to refunds of excess tax or penalty paid by the assessee under the Income-tax Act. These provisions can broadly be divided into two groups--(i) where the claim for refund is to be made, sections 237, 239 and 243 provide a procedure for it and (ii) other sections provi....
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....ent of interest on such refunds. Section 240 and the relevant part of section 244, with which we are concerned, are as under: "240. Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the Income-tax Officer shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make any claim in that behalf. 244. (1) Where a refund is due to the assessee in pursuance of an order referred to in section 240 and the Income-tax Officer does not grant the refund within a period of three months from the end of the month in which such order is passed, the Central Government shall pay to the assessee simple interest at twelve pe....
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....roceedings under the Income-tax Act" would include orders passed under section 154 (rectification proceedings), orders passed by the High Court or the Supreme Court under section 260 (in reference) and orders passed by the Commissioner of Income-tax in revision applications under section 263 or section 264 or on an application under section 273A of the Act. In this view of the matter, in our view, there is no reason to restrict the meaning of the phrase "other proceedings" under the Income-tax Act used in section 240 to only some orders by which refund of excess tax or penalty is granted and not to cover orders passed under section 154 of the Act. Further, section 154 of the Act empowers the income-tax authority to rectify a mistake brought....