Law:

Section:

Section 244 of the Income-tax Act, 1961 - Refunds - Interest where no claim is needed - Assessment years 1971-72 and 1973-74 - Petitioner assessee claimed interest on enhanced amount of unabsorbed allowance for delay in giving effect to appellate order in respect of assessment year 1971-72 granting substantial relief - Whether having regard to fact that no refund was due for assessment year 1971-72 and whatever interest was allowable for assessment year 1973-74 had been allowed, there was no direct nexus between order in appeal and payment of refund and hence neither section 240 nor section 244 was applicable to facts of case - Held, yes. Whether, as a consequence instant petition was to be dismissed - Held, yes FACTS For the assessment year 1971-72, the petitioner in the nil return had claimed certain deductions on account of various allowances which were admissible. In appeal, the quantum of deductions allowed was increased considerably. In respect of the assessment year 1973-74, the assessment had been made on 18-9-1976. The income assessed was Rs. 8,47,10,120 and the ITO gave effect to the Tribunal's order after 29 months in respect of the assessment year 1971-72 and, thereafter, the higher amounts of unabsorbed allowances carried forward was set off for the assessment year 1973-74 and, in respect of that year, the income was reduced from Rs. 8,47,10,120 to Rs. 4,32,33,083. In the instant petition the petitioner claimed interest on Rs. 57,03,175 which was the enhanced amount of unabsorbed allowance as a result of the Tribunals order. HELD In the instant case, neither section 240 nor section 244 was applicable. The Tribunal's order was only in respect of the assessment year 1971-72 and no refund was actually due to the petitioner in respect of the assessment year 1971-72 pursuant to the order having been passed by the Tribunal. It was true that the ITO should have given effect to the Tribunal's order in respect of the assessment year 1971-72 at an early date and if this had been done, the unabsorbed allowances would have increased and they could have been set off for the assessment year 1972-73 but, for the year 1973-74, a fresh order would have been passed…

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