Law:

Section:

Section 244, read with section 297(2)(d)(i), of the Income-tax Act, 1961 - Refunds - Interest on refund where no claim is needed - Assessment years 1958-59 to 1961-62 - In respect Of assessment years 1958-59 to 1961-62 assessee became entitled to interest in view of order passed by High Court - Whether assessee was entitled to interest under section 244 on amounts of refund due though relevant assessments were completed under Indian Income-tax Act, 1922 - Held, yes FACTS In respect of the assessment years 1958-59 to 1961-62 the assessee became entitled to interest in view of order passed by the High Court, though the assessments were completed under the 1922 Act. The assessee filed a writ petition praying the High Court to direct the income-tax authorities to issue the refund vouchers for interest under section 244 to it for the assessment years 1957-58 to 1960-61 and to pay the interest on the amount of refund due at 12 per cent from the respective dates when the said amount became refundable. It was contended that it was not open to the income-tax authorities to assert that since the assessments for the relevant assessment years were completed before the commencement of the Act, interest under section 244 could not be claimed by it; and that this stand of the Income-tax Department was not at all sustainable on the express provisions of section 297(2)(d)( i). HELD The claim of refund of the petitioner could not be defeated after the promulgation of the Act. Procedural matters are nothing but handmaids of justice. The substantive claim cannot be defeated by reason of technical defects and/or procedural irregularities. Since the refund had to be made by the revenue authorities, the same had got to be issued in accordance with law and they would have to pay 12 per cent interest in the manner as observed in the Act. The income-tax authorities were, accordingly, directed to take effective steps to refund the dues with interest at 12 per cent. CASES REFERRED TO CIT v. Sassoon J. David & Co. Ltd. [1990] 181 ITR 363/ 49 Taxman 152 (Bom.), New Woodlands v. CIT [1982] 138 ITR 795/9 Taxman 259 (Ker.), Trustees of H.E.H. the Nizam's Miscellaneous Trust v. CWT [1984]…

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