SAG CONSTRUCTION ASSOCIATES Vs. UNION OF INDIA

JUDGEMENT

(1.) This is a petition by an assesses seeking direction to respondent No. 5 to release payment of interest to the petitioner under Section 244(1A) of the Income- tax Act, 1961.

(2.) The facts relevant may briefly be noticed. Amount of Rs. 7,235/- was deducted as TDS from the assessee. The assessee filed a return and an order of assessment was made on 22.2.83. There was an appeal wherein by order dated 13.12.85, the Assistant Commissioner of I ncome Tax set aside the order of assessment. Thereafter a fresh order of assessment was made on 6.3.88. On 31.3.88, the petitioner moved an application to the ITO for awarding interest on the amount of Rs. 7,235/- which fell due and payable to the petitioner consequent upon the order of assessment. The prayer was rejected. The petitioner preferred an appeal which was held to be not maintainable. Thereafter the petitioner moved an application under Section 264 of the Act to the Commissioner of Income Tax. By order dated 22.6.90, the petitioner's application was rejected holding that Section 244(1 A) was not attracted to the facts of the case. The writ petition has thereafter been filed by the petitioner.

(3.) The issue arising for decision is no more res Integra and stands concluded by the law laid down by the Supreme Court in Modi Industries Vs. Commissioner of Income Tax (1995) 216 ITR 759. At page 780, their Lordships have approved the view taken by Punjab & Haryana High Court in the case of CITVs. Leader Engineering Works [1989] 178 ITR 529 holding that the advance tax paid lost its identity the moment it was adjusted towards the tax liability created under the regular assessment and took the shape of payment of tax in pursuance of the order of assessment. At page 787, their Lordships have held :-