Law:

Section:

Income tax--- Appeal to CIT (Appeals)---Competency of appeal---Refusal to grant interest under S.214---Appeal against entire order of assessment ---Assessee can challenge order refusing interest under S.214---Indian Income Tax Act, ,1961, S.214. No appeal would lie against an order refusing to grant interest under section 214 of the Income Tax Act, 1961, simpliciter, but, when the entire assessment is challenged before the Appellate Assistant Commissioner, it is open to the assessee to challenge the order of the income-tax Officer refusing to grant interest under section 214. Central Provinces Manganese Ore Co. Ltd. v. CIT (1986) 160 ITR 961 (SC) and Triplicane Urban Cooperative Society Ltd. v. CIT (1980) 126 ITR 125 (Mad.) fol. CIT v. City Palayacot Co. (1980) 122 ITR 430 (Mad.) and CIT v T.T. Investments and Trades (P.) Ltd. (1984) 148 ITR 347 (Mad.) ref. JUDGMENT N.V. BALASUBRAMANEAN, J.---At the instance of the assessee, the Tribunal under section 256(1) of the Income Tax Act, 1961, hereinafter referred to as the "Act", has referred the following question of law, for our consideration. "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the issue relating to the grant of interest under section 214 cannot be entertained even though an appeal was filed contesting various additions apart from the denial of interest under section 214 of the Income-tax Act?" The assessee is a company. The assessee, in the course of assessment proceedings for assessment year 1980-81 clamed interest before the Income-tax Officer under section 214 of the Act. The Income-tax Officer did not grant the interest on the ground that a sum of Rs.25.8 lakhs paid by the assessee was not an advance tax, but an ad hoc payment and, hence, he did not allow any interest under section 214 of the Act, even though there was a refund of a sum of Rs.4,90,994. There were certain other disallowances and additions in the order of assessment. The assessee challenged the order of the assessment disputing the deduction of the value of subsidy received from SIPCOT, from the actual cost under section 43(1) of the Act and alongwith some other objections, against the…

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