RANI LILA BHARGAVA Vs. UNION OF INDIA

JUDGEMENT

(1.) This is the plaintiffs' appeal against the judgment of the learned single judge dated July 28, 1972, by which the suit was dismissed (since reported in : [1973]92ITR312(Delhi) ).

(2.) This is the plaintiffs' filed a suit for the recovery of Rs. 1,29,640.98 against the respondent Union of India. The claim related to the interest on refund for the Income Tax and E.P. Tax paid by the applicant for the assessment of 1946 -47 (A.Y.). The tax liability was created on the appellant and he ultimately paid the tax on March 27, 1957. The appellant had, however, taken up the matter in appeal to the Income Tax Tribunal and then to the High Court. The reference was answered in favor of the assessed/appellant on April 7, 1966, with a direct by the High Court to refund the excess tax. A consequential order by the Tribunal was passed on September 16, 1966, with a direction by the High Court to refund the excess tax. A consequential order by the Tribunal was passed on September 16, 1966, and the Department refunded the excess amount of tax which had been realised from the appellant.

(3.) The appellant, however, claimed that he was entitled to interest on the amount refunded to him under s. 66(7) of the Indian I.T. Act, 1922, which provides that if an amount of assessment is reduced on a reference, the amount overpaid should be refunded with such interest as the Commissioner may allow. The Commissioner of Income Tax, however, took the view and informed the appellant on September 2, 1967, that the appellant's case was governed by s. 244(1) read with s. 297(2)(i) of the I.T. Act. 1961, and as the refund, due as a result of the Tribunal's order under s. 66(5) of the Act, had been granted within a period of six months from the date of the said order, no interest was allowable. This made the appellant to file the suit out of which this appeal has arisen. Two main issues namely, No. 4 and 6, were canvassed before the learned judge, namely, whether the case of the appellant was governed by the Indian I.T. Act of 1922 or the I.T. Act, 1961 and whether the civil courts have jurisdiction to try the suit. The learned judge held in favor of the appellant that his case was governed by the old Act of 1922. For this purpose he relied on Raja Jagdambika Pratap Narain Singh v/s. : [1970]76ITR619(All) in which it had been held that, in a similar situation in the reference, the provisions of the Act of 1922 will apply. The learned judge noticed that this view was contrary to the view taken by the Madras High Court in Pandyan Insurance Co. Ltd. v/s. : [1969]73ITR12(Mad) and Jogendra Nath Naskar v/s. CIT . He however, preferred to follow the view in Raja Jagdambika Pratap Narain Singh v/s. : [1970]76ITR619(All) . He, however, dismissed the suit on his further finding that the civil courts have no jurisdiction to try the suit.