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ORDER Challa Kodanda Ram, J. - This writ petition has been filed seeking to declare the action of the 1st respondent in not paying the interest from 1.4.1987 to 22.12.1998 to the petitioner under Section 214 read with other provisions of the Income Tax Act (for short, the Act) for the income-tax assessment year 1984-85 in the consequential order dated 22.12.1998 as unconstitutional, illegal and consequently prays the Court to direct the respondents to pay the interest for the above said period. 2. For the assessment year 1984-85, the petitioner/assessee had paid an advance tax of Rs.22,55,000/- and had also paid an amount of Rs.50,881/- to his credit by way of T.D.S. Assessee was finally assessed to income under the head Long Term Capital Gains for a sum of Rs.3,28,732/-. Thus, the assessee became eligible for refund of an amount of Rs.19,77,149/- along with interest under Section 214 of the Act. By order dated 22.12.1998, the assessee was determined to be entitled for a refund of Rs.19,77,149-, on which he was also entitled to be paid interest under Section 214 of the Act for the period from 01.04.1984 to 31.03.1987 as per the applicable rates and finally the same was arrived at Rs.8,35,325/-. These facts as set out in the affidavit filed along with the writ petition are not in dispute. In the present writ petition, the claim of the assessee is for payment of compensation on account of the delay in payment of the interest amount for the period from 31.03.1987 to 22.12.1998. The assessees claim for interest came to be rejected by the Deputy Commissioner of Income Tax (Asset), Special Range, Hyderabad, through the letter No.S-2/SR.3 dated 18.05.1998 on the ground that there was no provision in the Act to grant interest on interest. It was also further stated that in terms of the judgment of the Supreme Court reported in Modi Industries Ltd. v. CIT [1995] 216 ITR 759/82 Taxman 377, interest is allowable only from the 1st day of April of the assessment year to the date of making an order of assessment. 3. A detailed counter-affidavit has been filed by the 1st respondent Joint Commissioner of Income-tax (Assts.), Special Range-5, Hyderabad on his behalf and on…

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