1987 (11) TMI 49

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....rate years, 1963-64 and 1964-65. The Income-tax Officer (O.P.No.2) had refused to grant registration to the petitioner for the assessment years in question on certain grounds which need not be discussed. The petitioner's appeal before the Appellate Assistant Commissioner also failed. Thereafter he took the matter before the Appellate Tribunal. The Tribunal, by its order dated December 20, 1972 (annexure-1), set aside both the orders mentioned above and directed O. P. No. 2 to reconsider the claim for registration in the light of the finding recorded by the Tribunal and after giving due opportunity to the assessee. After the remand, the Income-tax Officer, by his order dated September 29, 1976, allowed the claim for registration and as....

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....me-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. Interest on refund where no claim is needed.-(1) Where 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 period of six months from the end of the month in which such order is passed, the Central Government shall pay to the assessee simple interest at four per cent. per annum on the amount of refund due from the date immediately following the expiry of the period of six months aforesaid to the date on which the refund is granted." On the basis of the above provisions, it was contended by Mr. ....

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....e refund pending a fresh assessment proceeding was pointed out to us. Under the Income-tax Act, although a liability accrues on an assessee to pay the tax for each year, rather in advance, that is only a mode for the convenience of collection. The tax as such becomes due and payable only when an assessment order is passed and a liability is created followed by a demand notice under section 156 of the Act. Obviously, in the absence of any assessment order, there is no liability for payment of any income-tax. In that view of the matter, on the setting aside, of the assessment orders by the Tribunal, the tax already paid by the petitioner became refundable under the provisions of section 240 of the Act. The liability of the petitioner arose....