ATMARAM J HATHIWALA Vs. SARUP S ITO

JUDGEMENT

(1.) THIS petition is filed against the order dt. 30th Dec., 1985 (Annexure 'F') passed by the CIT, Surat under S. 264 of the IT Act ("the Act" for short) rejecting the petitioner's refund applications against the ITO's refusal in granting interest under S. 244(1A) of the Act on the amount of penalty, which is waived under S. 273A of the Act.

(2.) BY the order dt. 25th Aug., 1982, the CIT waived the penalty imposed under ss. 271(1)(a), 273 (a) and 273(c) of the Act for the asst. yrs. 1974 75 and 1975 76. In view of the aforesaid order, the petitioner filed an application before the ITO, Surat, praying that the amount as remitted by the CIT be refunded with interest under S. 244(1A) r/w r. 119(A). It was also prayed that the interest amount which the petitioner has paid on some delayed payments be also refunded with interest. The ITO refunded the amount without paying any interest as provided under S. 244(1A) of the Act. The petitioner therefore preferred revision applications under S. 264 of the Act. Those revision applications were rejected by the CIT solely on the ground that the relief under S. 273A is not the relief from the unjustified levy of tax or penalty and, therefore, the provisions of S. 244(1A) would not apply on the refund arising due to waiver under S. 273A of the Act.

(3.) FOR appreciating the rival contentions raised by the learned counsel for the parties, it would be necessary to refer to the relevant provisions under Chapter XIX pertaining to refunds of excess tax or penalty paid by the assessee under the IT Act. These provisions can broadly be dividend into two groups (i) where the claim for refund is to be made, ss. 235, 239 and 243 provide procedure for it and (ii) other sections provide for the cases where no claim is required to be made and the concerned officer is required to refund the amount in pursuance of the order passed in appeal or in any other proceedings. The said sections are ss. 240, 241 and 244. Sec. 237 inter alia provides that, if any person satisfies the ITO that the amount of tax paid by him for any assessment year exceeds the amount with which he is properly chargeable for that year, he shall be entitled to a refund of the excess. Sec. 238 provides as to who would be entitled to file an application for refund. Sec. 239(1) inter alia provides that every claim for refund shall be made in the prescribed form and verified in the prescribed manner. Sub s. (2) provides limitation within which an application for refund can be filed. Sec. 243 provides that in the cases where the ITO does not grant refund as provided therein, the Central Government shall pay the assessee the said amount with interest. In the present case, we are not required to deal with these sections. As against this, s. 240 provides that where, as a result of any order passed in appeal or other proceeding under the Act, refund of any amount becomes due to the assessee, the ITO shall refund the amount to the assessee without his having to make any claim in that behalf. However, S. 243 empowers the ITO to withhold the refund in a case where an order giving rise to a refund is the subject matter of an appeal or further proceedings. Sec. 244 provides for payment of interest on such refund. Sec. 240 and relevant part of S. 244, with which we are concerned, are as under :