VIKRANT TYRES LIMITED Vs. FIRST INCOME TAX OFFICER

JUDGEMENT

(1.) AN interesting question pertaining to levy of interest is involved in this writ petitions. The petitioner has challenged the invocation of section 220, sub-section 2, of the Income-tax Act, 1961, under the following circumstances.

(2.) THE assessment years in question are 1977-78, 1978-79, and 1980-81. In respect of each of this years, assessment orders were made and demand notices were issued. THE petitioner complied with the demands by paying the tax due. However, the petitioner challenged the order by filling a appeals. THE appellate authority allowed the appeals filled by the petitioner. Consequently, the taxes paid were refunded to the petitioner. THE appeals filed by the revenue before the Appellate Tribunal were also dismissed. However this court took a different view from that of Appellate Tribunal and upheld the view taken by assessing authority resulting in upholding of all assessment orders. Consequently, the assessee had to pay tax has assessed. After the high court disposed of the references, consequential orders were made by Appellate Tribunal under section 260. THEreafter, fresh demands were raised and assessee paid the taxes has assessed. Not being satisfied with the success before the high court the revenue invoked section 220(2) of the act and demanded interest of assessed tax for the period commencing with the refund of the taxes consequent on the first appellate order till the taxes were finally paid after disposal of the references.

(3.) SECTION 220 so far has it relates to our purpose, reads thus :