KAR MOBILES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner in Original Petition No. 4994 of 1990, a public limited company, is the appellant in this writ appeal. In the original petition, the prayer was to quash exhibit P-9 order passed in revision by the second respondent-Commissioner of Income-tax, dated November 17, 1988. THE appellant is an assessee to income-tax. For the assessment year 1971-72, the appellant filed the return of income on October 15, 1971. THE assessment was originally made on March 27, 1974. Subsequently, there were appeals and the matter was finally decided by the Income-tax Appellate Tribunal on January 31, 1986. THE Income-tax Officer gave effect to the order of the Appellate Tribunal on April 16, 1986. THE assessee claimed interest for the period from April 1, 1971, to the date of issue of the refund order of the Income-tax Officer, on the entire advance tax paid amounting to Rs. 13,46,950 and the tax deducted at source, viz., Rs. 1,680 and the amounts paid on April 27, 1974 and August 12, 1974, in the sum of Rs. 4,35,873. This was declined by the Income-tax Officer. In revision, the Commissioner of Income-tax, relying on the Full Bench decision of this court in CIT v. G.B. Transports [1985] 155 ITR 548, construed the words "regular assessment" occurring in Section 214(1) of the Income-tax Act as the initial assessment or the first assessment made by the Income-tax Officer under Section 143(3) or under Section 144 of the Act and held that it does not include any modified or revised order passed by the Income-tax Officer subsequently to give effect to any appellate order. It was held that, under Section 214(1) of the Act, interest should be paid only up to the date of the regular assessment from first April of the assessment year. THE plea of the assessee was negatived. In the original petition, the assessee/petitioner attacked the order passed in revision by the Commissioner of Income-tax, evidenced by exhibit P-9. A learned single judge of this court, relying on the Full Bench decision of this court in G.B. Transports' case [1985] 155 ITR 548, held that the relief prayed for in the original petition cannot be granted and the original petition was dismissed. THE assessee/petitioner has come up in writ appeal.

(2.) WE heard counsel for the appellant, Mr. C.M. Devan. The only question that arises for consideration is about the date of the "regular assessment" up to which the Revenue is bound to pay interest for the advance tax paid during the financial year. There is a short cleavage of judicial opinion on this point. The Calcutta, Gujarat and Rajasthan High Courts, in the decisions in Chloride v. CIT [1977] 106 ITR 38 (Cal) ; General Fibre Dealers Ltd. v. 1TO [1979] 116 ITR 40 (Cal) ; Bardolia Textile Mill v. ITO [1985] 151 ITR 389 (Guj) [FB] and CIT v. M.L. Sanghi [1988] 170 ITR 670 (Raj), have held that a fresh or revised order passed in pursuance of the appellate order is none the less a regular assessment order under Section 143 of the Act and, in this view, the assessee is entitled to interest on the advance tax up to the date of the revised order of assessment. These decisions fully support the appellant. But, a Full Bench of this court, in CIT v. G.B. Transports [1985] 155 ITR 548, has taken a different view and has held that, in such cases, interest is payable only up to the date of the original assessment. A similar view has been taken by the Allahabad, Punjab and Haryana, Andhra Pradesh and Bombay High Courts--Lala Laxmipal Singhania v. CIT [1977] 110 ITR 289 (All); CIT v. Rohtak Delhi Transport P. Ltd. [1981] 130 ITR 777 (P & H) ; CIT v. Ambala Electric Supply Co. Ltd. [1983] 142 ITR 872 (P & H) ; Nizam's Religious Endowment Trust (Trustees of H. E. H.) v. ITO [1981] 131 ITR 239 (AP) and CIT v. Carona Sahu Co. Ltd. [1984] 146 ITR 452 (Bom) [FB].