1980 (8) TMI 44

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....t for our purpose, are as follows: " 66. (7) Notwithstanding that a reference has been made under this section to the High Court, income-tax shall be payable in accordance with the assessment made in the case: 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 ........" The contention raised by the petitioner in the present writ petition is that the Commissioner is bound, as a matter of law, not only to order refund of the amount of tax paid in excess but also to pay interest on the amount of tax paid in excess. It is not open to the Commissioner to say that no interest at all would be paid. Therefore, the ord....

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....atter to the Supreme Court and the Supreme Court (CIT v. Khushal Chand Daga [1961] 42 ITR 177), by its order dated March 7, 1961, confirmed the judgment of this court. As per the directions of the Tribunal, the Ist respondent did not give effect to the order of the High Court. It is in these circumstances that the petitioner seeks to be paid interest for the assessment year 1943-44, as it is not in dispute that, for the assessment year 1942-43, the amount overpaid has been refunded with interest. The learned advocate for the petitioner contended that the proviso to sub-s. (7) of s. 66 does not say that the reference must be for the same year, but, if the amount of an assessment is reduced as a result of a reference, then the petitioner i....

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....icular assessment year had been made. Shri Joshi relied upon the decision of the Madras High Court in S.V.P.N. Sithambara Nadar Sons v. CIT [1968] 67 ITR 45, in which case, the Division Bench of the Madras High Court has considered the provisions relating to s. 66(7) and the proviso thereto. According to the Division Bench, both the substantive provisions in s. 66(7) of the Indian I.T. Act, 1922, and the proviso thereto deal with the same assessment which formed the subject-matter of the reference it will, therefore, be inappropriate to say that if as a result of a principle settled by the High Court in a reference in respect of one year, a relief by way of refund is granted for other years by applying that principle, such refund results....