Law:

Section:

Section 214 of the Income-tax Act, 1961 - Advance tax - Interest payable by Government - Assessment year 1988-89 - In financial year 1987-88, relevant to assessment year 1988-89 assessee-company had paid Rs. 1,62,98,750 towards advance tax - Subsequently on 23-6-1988, i.e., after financial year, assessee had paid further tax of Rs. 54,00,000 - Assessing Officer framed assessment under section 143(3) and granted refund of Rs. 2,31,57,382 to assessee - Assessee was also paid interest under section 214 on amount of Rs. 1,62,98,750, but no interest in respect of amount of Rs. 54,00,000 was paid to assessee - Whether since amount of Rs. 54,00,000 had been paid after financial year, same was not in nature of advance tax, and therefore, assessee would not be entitled to payment of interest under provisions of section 214(1) on said amount - Held, yes Section 244 of the Income-tax Act, 1961 - Refunds - Interest where no claim is needed - Assessment year 1988-89 - Whether on facts stated under heading "Advance tax - Interest payable by Government", in view of decision of Apex Court in case of Modi Industries Ltd. v. CIT [1995] 216 ITR 759/ 82 Taxman 377, assessee would be entitled to grant of interest from date of assessment order to date of payment of refund under provisions of section 244(1A) - Held, yes - Whether further, in view of decision of Gujarat High Court in D.J. Works v. DCIT [1992] 195 ITR 227/ 64 Taxman 91, assessee would also be entitled to payment of interest on amount of interest payable on sum of Rs. 54,00,000 at rate specified under section 244(1A) from date of refund till date on which amount of interest was actually paid - Held, yes FACTS In the financial year 1987-88 relevant to assessment year 1988-89, assessee had paid Rs. 1,62,98,750 towards advance tax. Subsequently on 23-6-1988, i.e., after financial year, assessee had paid further tax of Rs. 54,00,000. The Assessing Officer framed assessment under section 143(3) and granted refund of Rs. 2,31,57,382 to assessee. The assessee was also paid interest under section 214 on amount of Rs. 1,62,98,750. However, in respect of the amount of Rs. 54,00,000 paid on 23-6-1988, i.e. after the financial…

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