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Section 214(1) of the Income-tax Act, 1961 - Advance tax - Interest payable by Government - Whether where assessee is found entitled to a refund of excess amount of tax deposited by him as a consequence of an order made in appeal, he is also entitled to interest in accordance with section 814(1) on amount of refund -Held, yes Facts A certain amount of sum was found to be the excess amount of tax deposited by the assessee as a result of the AAC's order deciding the assessee's quantum appeal and the same was directed to be refunded to the asses see together with interest payable in accordance with section 214(1) read with rule 119A of the Income-tax Rules, 1962. On appeal, the Tribunal upheld the direction given by the AAC. On reference: Held The order of the AAC in the quantum appeal is really a direction to the ITO to correct the earlier order of assessment in the manner directed by the AAC, so that the final assessment order made as a result of the directions given in the appellate order quantifying the amount of tax determined as the assessee's liability is really by the ITO himself in compliance with the directions given in the appellate order. In fact, the original order of the ITO no longer survives after the modification made in this manner, and the only order of regular assessment in existence as a result of the appellate order is that order of the ITO which is made in compliance of the directions given in the appellate order. This alone is sufficient to indicate that where the assessee is found entitled to a refund of the excess amount of tax deposited by him as a consequence of an order made in appeal, he is also entitled to interest in accordance with section 214(1) on the amount of refund. Accordingly, in the instant case, the assessee was entitled to interest under section 214(1). Cases referred to Chloride India Ltd. v. CIT [1977] 106 ITR 38 (Cal.) and Bardolia Textile Mills v. ITO [1985] 151 ITR 389 (Guj.) (FB). R.N. Surolia for the Applicant. V.K. Singhal for the Respondent. JUDGMENT 1. This reference under section 256(1) of the Income-tax Act, 1961 ('the Act') at the instance of the revenue is to answer the following question of law: "Whether,…

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