COMMISSIONER OF INCOME TAX Vs. PRAHLAD MALIRAM

JUDGEMENT

(1.) ON an application filed under Section 256(1) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal, Jaipur, has referred the following question for our opinion :

(2.) THE assessee-Hindu undivided family was allowed refund of Rs. 54,364 as per order under Section 154 of the Income-tax Act, 1961, dated October 15, 1990, on account of interest under Section 244(1A) of the Act, in respect of the assessment years 1958-59 and 1959-60, However, a demand for Rs. 28,163 was created against the assessee-Hindu undivided family vide ITNS-150, dated January 22, 1990, and the refund was adjusted against such demand and such order of adjustment was passed prior to April 1, 1975. By a subsequent order dated May 21, 1991, the Income-tax Officer withdrew the interest allowed by him under Section 244(1A) of the Act and in appeal his action was upheld by the learned Deputy Commissioner (Appeals).

(3.) SUB-section (1A) of Section 244 of the Income-tax Act, 1961, has been inserted with effect from October 1, 1975. Before we go into the facts of the case in hand, we would like to refer to some observations of various High Courts. In the case of Sag Construction Associates v. Union of India [1998] 234 ITR 501, the High Court of Delhi, at page 502, observed as under :