Law:

Section:

Section 240, read with section 297(2)(i), of Income-tax Act, 1961 - Refunds - On appeal etc. - Assessment year 1954-55 - Assessee claimed interest on refund under provisions of section 66(7) of Act, 1922 which arose in consequence of decision of Supreme Court - Whether since refund in consequence to Supreme Court's judgement fell after commencement of Act, provision of Act relating to interest payable by Central Government on refunds shall apply - Held, yes - Whether since refund indisputedly had been made within six month of order which directed it, there was no liability on part of department to pay interest - Held, yes Words & pharses : Words "other proceedings under this Act" occurring in section 40 of Income-tax Act, 1961 FACTS The petitioner was a public limited company doing business in general insurance. In respect of its claim for depreciation written off of buildings, air conditioning plants, lifts, etc. the Supreme Court held that the petitioner was entitled to the allowance of the entire amount of depreciation which had been written off in its accounts. As a result, the petitioner became entitle to a refund of a substantial amount within six months of the date of the order entitling the petitioner to refund. The petitioner thereafter claimed interest from date of payment to the date of refund under the proviso to sub-section (7) of section 66 of the Act, 1922, at 6 per cent on the amount of tax paid in excess. The Commissioner disallowed the claim. On petition : HELD In the instant case the assessment was completed before the commencement of the Act. It could not be acceded that the assessment should be taken to the have been completed only when the Supreme Court rendered its . Further, the refund in consequence of the Supreme Court's fell due after the commencement of the new Act. The first requisites for the application of section 297(2)(i) are, therefore, satisfied. That being the case, this provision is clear that to such a case the provisions of the new Act relating to interest payable by the Central Government on refunds shall apply. In view of that provision, the intention of which appears to be that the interest on refund in respect of…

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