Law:

Section:

I. Section 265 of the Income-tax Act, 1961 (Corresponding to section 66(7) of the Indian Income-tax Act, 1922) - Tax to be paid notwithstanding reference, etc. - Assessment year 1946-47 - Whether sub-section (7) applied only to cases where matter had been taken to High Court on a reference and as result of High Court's decision on such a reference refund of excess tax had fallen due and it did not provide for a general right to claim interest from date of excess collection - Held, yes - Whether Commissioner had been given discretion to fix rate of interest taking into account peculiar facts and circumstances of each case - Held, yes II. Section 240 (Corresponding to section 66(7) of the Indian Income-tax Act, 1922), read with sections 244 and 297 of the Income-tax Act, 1961 - Refunds - On appeal, etc. - Assessment year 1946-47 - By virtue of assessment order and demand, excess tax (refunded later) was paid on 18-3-1958 - After decision on quantum appeal by Supreme Court, Tribunal by its consequential order dated 25-10-1965 directed refund - Refund was actually effected on 25-2-1966 - Assessee claimed interest at 12 per cent from date of payment of excess tax till date of actual refund under section 66(7) of 1922 Act - Whether sub-section (7) did not provide for a general right of interest on excess collections made by revenue from date of payment - Held, yes - Whether in view of section 297(2)(i) of 1961 Act claim for interest had to be considered only under section 244 of 1961 Act - Held, yes III. Section 297 of the Income-tax Act, 1961 - Repeals and saving - Assessment year 1946-47 - Whether expression 'assessment completed' in section 297(2)(i) does not denote an assessment which has become final - Held, yes FACTS The petitioner was assessed to income-tax on 28-3-1951, for the assessment year 1946-47, the relevant year of account being the year ended 31-1-1946, on a total income and a demand was raised against him and coercive process was resorted to collect the said amount by auctioning the premises of the petitioner to realise the tax arrears. The AAC allowed the petitioner's appeal on 26-2-1952. On departments appeal, the Tribunal decided the issue…

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