Gujarat High Court
Cit vs Bombay Conductors & Electrical (P) Ltd. on 20 November, 2002
Equivalent citations: [2003]131TAXMAN204(GUJ)
Author: A.R. Dave
Bench: A.R. Dave
JUDGMENT A.R. Dave, J.
The following question of law has been referred to this court at the instance of the revenue by the Income Tax Appellate Tribunal Ahmedabad Bench 'C' under the provisions of section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act').
Whether, in the law and on facts, the Commissioner (Appeals) was justified in directing the Income Tax Officer to recalculate the interest under section 244(1A) and issue appropriate refund orders to the assessee and the Tribunal was right in law in confirming the view taken by the Commissioner (Appeals) ?"
2. We have heard Mrs. Mona Bhatt, Central Government standing counsel, appearing for the revenue. Nobody has appeared for the respondent assessee though the respondent assessee has been duly served with the notice of this court.
3. The facts involved in the reference, in a nutshell, are as under :
4. In pursuance of an order passed by the Tribunal. The Income Tax Officer had awarded interest to the assessee as per the provisions of section 244(1A) of the Act as the assessee had become entitled to get the amount of refund. The assessee was given the amount of interest, but the said order was rectified under the provisions of section 154 by the Income Tax Officer as the Income Tax Officer later on thought that the amount of interest was given to the assessee due to mistake. Being aggrieved by the order passed under the provisions of section 154 of' the Act, an appeal had been tiled before the Commissioner (Appeals) and the appeal had been allowed. The revenue challenged (the validity of the order passed by the Commissioner (Appeals) before the Tribunal and the Tribunal upheld the order of the Commissioner (Appeals).
5. Though the learned standing counsel has tried her best to support the order passed by the Income Tax Officer under section 154 of the Act, looking to the fact that the respondent assessee had become entitled to the amount of refund, it cannot be disputed that the assessee had become entitled to the amount of interest under section 244(1A) of the Act. The order, which was initially passed by the Income Tax Officer, was just and proper and therefore no mistake was committed by him in awarding the amount of interest and there was no question of passing any order for rectification under the provisions of section 154 of the Act.
6. Simply because the Tribunal did not give any direction with regard to paying interest, it cannot be said that the assessee was not entitled to the amount of interest because the provisions of section 244(1A) of the Act clearly mention that whenever an additional amount of refund becomes payable to the assessee, or when the order of penalty paid by the assessee is quashed and set aside, the assessee becomes entitled to interest on the amount which becomes payable to the assessee.
7. In our opinion, the assessing officer was justified in awarding interest as per the provisions of section 244(1A) of the Act. We are, therefore, of the view that the Tribunal did not commit any error while confirming the order passed by the Commissioner (Appeals).
8. in view of the above facts, we answer the question in the affirmative, i.e., in favour of the assessee and against the revenue.
The reference stands disposed of accordingly with no order as to costs.