COMMISSIONER OF INCOME-TAX Vs. HAJI ABDUL HAMEED

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Allahabad has referred the following question of law under Section 256(2) of the Income -tax Act, 1961 (hereinafter referred to as 'the Act') for the opinion of this Court. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that there was no mistake in the order dated May 21, 1979, that could be rectified under Section 154 of the Income -tax Act, 1961 ?

(2.) THE reference relates to the assessment years 1962 -63, 1970 -71 and 1971 -72.

(3.) ON giving effect to the Appellate Tribunal's order dated June 30, 1976, for the assessment years 1962 -63, 1970 -71 and 1971 -72, a refund of Rs. 11,44,656 became due to the assessee. This refund was withheld three times in terms of Section 241 of the Act till December 31, 1977, and then till July 31, 1978, and lastly till October 31, 1978, vide orders passed by the Commissioner of Income -tax on September 30, 1977, May 15, 1978, and July 31, 1978, respectively. Interest of Rs. 3,54,733 was allowed to the assessee vide order under Section 254 of the Act dated May 21, 1979. Subsequently, the Assessing Officer passed an order dated July 27, 1982, August, 2, 1982, under Section 154 of the Act withdrawing interest to the tune of Rs. 1,02,987 on the premise that as the period of three months was not excluded from each of the three orders under Section 241 of the Act for calculation of interest payable under Section 244(2) of the Act, as per the order dated May 21, 1979, interest to the extent of Rs. 1,02,987 was allowed in excess. In appeal, after pointing out the controversy involved in the issue, the Commissioner of Income -tax (Appeals) held that the case was not of application of Section 154 of the Act legally. Vide order dated July 26, 1987, the Assessing Officer's order under Section 154 of the Act was annulled and the assessee's appeal allowed. In appeal by the Department, the Tribunal vide its order dated February 28, 1992, rendered in I.T.A. Nos. 462, 463 and 464 (Alld)/1988 concurred with the interpretation of the Commissioner of Income -tax (Appeals) of the provisions of Section 244(2) of the Act. Further, it was held that even if for argument's sake the interpretation being given by the Assessing Officer were to be applied, the type of controversy that was involved in this case cannot be resolved by resorting to Section 154 of the Act, because these provisions cannot be applied where long drawn process of reasoning was necessary. Accordingly, the order of the Commissioner of Income -tax (Appeals), quashing the order passed by the Assessing Officer was upheld and the Department's appeals were dismissed.