COMMISSIONER OF INCOME-TAX Vs. DEHRADUN CLUB LTD.

JUDGEMENT

(1.) THIS appeal under Section 260A of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'), is directed against the common order dated June 6, 2005, passed by the Income -tax Appellate Tribunal, Delhi Bench 'E' New Delhi (for short, the ITAT) in I.T.A. Nos. 376 and 377/Del/2003 pertaining to the assessment years 1997 -98 and 1998 -99 respectively, whereby the Income -tax Appellate Tribunal has dismissed the appeal of the Department and confirmed the order of the Commissioner of Income -tax (Appeals), who set aside the recovery of interest under Section 154 calculated according to the provisions of Section 234B of the Act while revising the original assessment order passed under Section 143(3) dated November 24, 2000. The Commissioner of Income -tax (Appeals) set aside the demand of interest on the ground that it does not contain any reason for imposition of interest under Section 234B of the Act.

(2.) WE have considered the rival contentions put forth by Sri Arvind Vashistha, learned standing counsel for the Department and Sri S.K. Posti, learned amicus curiae appointed by this Court and perused the record.

(3.) FROM the perusal of the assessment order, it is clear that assessment under Section 143(3) was completed on November 24, 2000 and demand of Rs. 3,39,279 was made. The Assessing Officer vide his order dated January 9, 2001, granted instalment of Rs. 65,000 per month to pay this demand and also to pay the demand of the assessment year 1998 -99. The assessee -company paid nine instalments of Rs. 65,000 each and also paid Rs. 50,000 on May 18, 2001, against the demand of the assessment year 1997 -98. The total payment so made came to be Rs. 7,16,845 against the demand of the assessment year 1997 -98, which was in excess of the demand of the assessment year 1997 -98. The excess amount over the demand was refunded. The assessee -company did not pay any amount against the demand of the assessment year 1998 -99. Accordingly, under Section 154 of the Act the calculation of refund was made as under: