Law:

Section:

Section 214 of the Income-tax Act, 1961 - Advance tax - Interest payable by Government - Assessment years 1983-84 to 1985-86 - Whether interest is payable by Government to assessee on interest payable under section 214 which is wrongly withheld by Assessing Officer - Held, yes FACTS For the assessment years 1983-84 to 1985-86, the Assessing Officer gave effect to the appellate orders, on 4-10-1988 and granted refunds to the petitioner accordingly. The petitioner was entitled to payment of interest under section 214 on the amount refunded to it for those years but the Assessing Officer did not award any interest on the amounts refunded. On writ, the petitioner also claimed interest on the amount of interest wrongly withheld by the Assessing Officer. HELD Section 214(1) itself recognizes in principle liability to pay interest on the amount of tax paid in excess of the amount of assessed tax and which is retained by the Government. There is no reason why the same principle should not be extended to the payment of interest which has been wrongfully withheld by the Assessing Officer or the Government. In the present case, it was the duty of the Assessing Officer to award interest on the excess amount of the tax paid by the petitioner while giving effect to the appellate order and granting refund of the excess amount. If the excess tax paid could not be retained without payment of interest, so also the interest which was payable thereon could not be retained without payment of interest. Once the interest amount becomes due, it takes the same colour as the excess amount of tax, which is refundable on regular assessment. Therefore, though there is no specific provision for payment of interest on the interest amount for which no order was passed, at the time of passing the order of refund of excess amount and which had been wrongfully retained, interest would be payable at the same rate at which the excess amount carried interest from the date it became payable to the date it was actually paid. In the result, the writ petition was allowed. CASE REFERRED TO Bardolia Textile Mills v. ITO [1985] 151 ITR 389 (Guj.) (FB). K.H. Kaji for the Petitioner M.J. Thakore and M.R.…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492