Law: Income Tax Act, 1961

Section: 264,244A(1)(b),140A,156,143(3),206C

JUDGMENT M.S. Sanklecha, J. - The challenge in this petition is to the order dated 28 September 1999 passed by the Commissioner of Income Tax under Section 264 of the Income Tax Act, 1961 ("the Act"). The impugned order holds that no interest is payable under Section 244A(1)(b) of the Act on the refund of excess amount paid as tax on self assessment under Section 140A of the Act. 2. The Assessment Year involved in Assessment Year 1994-95. 3. Briefly, the facts leading to this petition, are as under:- (a) On 23 November 1994, the petitioner filed its return of Income for Assessment Year 1994-95 declaring a total income of Rs.13.12 crores. The tax payable on the declared income was Rs.6.79 crores. The petitioner paid the tax by way of advance tax and credit for tax deducted at source. However as there was still a shortage of tax payable, the petitioner paid Rs.2.60 crores on 31 August 1994 as and by way of tax on self assessment. The challan evidencing the payment of the tax on self assessment was annexed along with the Return of Income. (b) On 31 December 1996 the Assessing Officer completed the assessment for Assessment Year 1994-95 under Section 143(3) of the Act. The above order dated 31 December 1996 determined the petitioner's income at Rs.15.27 crores. Consequent to the above, a notice of demand under Section 156 of the Act was issued to the petitioner raising a demand of Rs.1.76 crores. It appears that the demand of Rs.1.76 crores was set off against the refund due to the petitioner for Assessment Year 1995-96. (c) Being aggrieved, the petitioner carried the matter in appeal to Commissioner of Income-Tax (Appeals) (CIT)(A). On 11 September 1997, the CIT(A) substantially allowed the petitioner's appeal. (d) Consequent to the above, by an order dated 20 October 1998, the Assessing Officer gave effect to the order dated 11 September 1997 of the CIT(A). As a result of giving effect to the order of the CIT(A), the petitioner was granted a refund of Rs 2 crores (tax of Rs.1.71 crores and interest of Rs.29 lacs). However, no interest inter alia was granted on Rs.18.24 lacs from the date of payment of tax on self assessment, i.e. 31 August 1994 till the date of…

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