COMMISSIONER OF INCOME TAX Vs. RAJALAKSHMI MILLS LIMITED

JUDGEMENT

(1.) UNDER Section 256(1) of the I.T. Act, 1961, the following questions have been referred at the instance of the Commissioner of Income-tax :

(2.) WHETHER, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that interest under Section 214 was to be allowed on the amount of refund attributable to the relief under Section 80J allowed in the revision order under Section 154 of the Act?

(3.) SUB-section (1A) deals with cases where on completion of the regular assessment the amount on which interest was paid under SUB-section (1) was reduced. In such a case the interest would correspondingly get reduced and the excess, if any, paid, is to be deemed to be tax payable by the assessee and recovered accordingly from him. SUB-section (2) of Section 214 provides that on any portion of such amount which is refunded under the chapter, interest shall be payable only up to the date on which the refund was made. Section 215 deals with cases where interest is payable by an assessee. For instance, in a case where an assessee estimates the advance tax payable by him and the advance tax so paid is less than seventy-five per cent. of the assessed tax, then simple interest at the rate of twelve per cent. per annum from the 1st day of April next following the said financial year up to the date of the regular assessment is payable by the assessee on the amount by which the advance tax so paid falls short of the assessed tax. SUB-section (2) covers cases where tax is paid under Section 140A, namely, under " Self assessment ". SUB-section (3) provides that where as a result of an order under Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 264, the amount on which interest was payable under Section 215 was reduced, the interest should be reduced accordingly and the excess interest paid, if any, was to be refunded by the assessee.