KHUSHALCHAND DAGA Vs. JOSHI N M ITO

JUDGEMENT

(1.) THE CBDT, the 3rd respondent herein, in response to the petitions dated January 22, 1973, and July7, 1973, filed by the petitioner for payment of interest on the amount of the tax paid in excess, decided that no interest was payable to the petitioner for the year 1943 44, in terms of the proviso to S. 66(7) of the Indian IT Act, 1922, the provisions of which, so far as they are relevant for our purpose, are as follows :

(2.) THE contention raised by the petitioner in the present writ petition is that the CIT is bound, as a matter of law, not only to order refund of the amount of tax paid in excess but also to pay interest on the amount of tax paid in excess. It is not open to the CIT to say that no interest at all would be paid. Therefore, the orders of the respondents, refusing to pay interest to the petitioner, are illegal and ultra vires and liable to be quashed.

(3.) THE brief background of the case is that the petitioner is a partner in several firms, registered and unregistered. For the asst. year 1941 42, the 1st respondent set off the petitioner's share of profits in an unregistered firm amounting to Rs. 1,75,256 against the petitioner's loss amounting to about Rs. 2,50,000. The 1st respondent passed an order determining the loss of Rs. 53,840 to be carried over and set off against the income of the subsequent assessment years. The petitioner did not file any appeal against the said assessment order of the 1st respondent, determining the loss to be carried over for the asst. year 1941 42.