PIONEER SPORTS WORKS Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE petitioner has challenged the order dated December 4, 1996, annexure P-3, withholding the amount of refund due to it, arising out of the order of the Commissioner of Income-tax (Appeals), Jalandhar, dated May 2, 1996. Further, prayer made is for directing the respondents to refund the amount due to the petitioner along with interest under Section 244 (1a) of the Income-tax Act, 1961 (hereinafter referred to as "the Act" ).

(2.) THE petitioner is a company incorporated under the Companies Act, 1956, with its head office at Jalandhar and is assessed to income-tax under the jurisdiction of the Assistant Commissioner of Income-tax, Circle 1 (2), Jalandhar, respondent No. 2. It is engaged in the business of manufacture and sale of sports goods. The assessment of the petitioner for the assessment year 1981-82 was annulled hy the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, on October 28, 1994. Respondent No. 2 gave effect to the order of the Tribunal and determined a sum of Rs. 10,30,171 as the refundable amount. After adjusting an outstanding amount of Rs. 35,370 against the petitioner, a sum of Rs. 9,94,801 was refunded, vide refund voucher dated February 15, 1995. Since credit for prepaid taxes had not been fully given, a further refund of Rs. 38,200 was issued on June 28, 1995. Amount of interest on the refunded amount was not paid. Claiming that the respondents were bound to refund the sum of Rs. 10,68,371 (Rs. 10,30,171 + Rs. 38,200) with interest under Section 214 (2) and Section 244 (1a) of the Act, the petitioner filed an appeal before the Commissioner of Income-tax (Appeals), Jalandhar, against the order of respondent No. 2. The Commissioner of Income-tax (Appeals), Jalandhar, vide his order dated May 2, 1996, accepted the plea of the petitioner and directed respondent No. 2 to allow interest under Section 214/244 (1a) of the Act to the petitioner. This direction was given by following the decision of this court in Deep Chand Jain v. ITO [1984] 145 ITR 676.

(3.) RESPONDENT No. 2, vide order, annexure P-3, dated December 4, 1996, informed the petitioner that the refund of interest on the principal amount which had already been refunded has been withheld by him with the approval of respondent No. 1 as the Department had filed a reference application in the High Court against the order of the Income-tax Appellate Tribunal. Refund of the amount of interest was ordered to be withheld till the decision of the High Court in the reference application.