Commissioner of Income Tax vs Godavari Sugar Mills Ltd.

T.D. Sugla, J.—In this Departmental reference relating to the assessee''s assessment for the asst. yr. 1966-67, the Income Tax Appellate Tribunal has referred to this Court the following three questions of law under s. 256 of the IT Act, 1961 :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the words "regular assessment" as appearing in ss. 214 and 216 of the IT Act, 1961, must be taken as meaning the assessment as had become final ?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to interest under s. 214 on the excess amount of tax paid with reference to the tax payable by the assessee as per the appellate order ?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the AAC''s order entertaining the assessee''s grounds of appeal regarding interest under s. 214 ?"

The counsel are agreed that, in view of the Full Bench judgment of our Court in the case of Commissioner of Income Tax, Bombay City - IV Vs. Carona Sahu Co. Ltd., , the first two questions are to be answered in the negative and in favour of the Revenue. The questions are so answered.

As regards question No. 3, it may be stated that the ITO had completed the assessment on 24th February, 1971 determining the assessee''s total income at Rs. 26,55,383. Tax payable thereon worked out to Rs. 14,94,479. This was against the payment of advance tax by the assessment of Rs. 14,60,000. Accordingly, the assessee was charged interest under s. 216, against which the assessee filed an appeal. In the meantime, the assessee''s total income was reduced as a result of appellate order and it became entitled to refund. In other words, the advance tax paid thus became in excess of the tax determined in pursuance to the appellate order. In its appeal against charging of interest under s. 216, the assessee not only claimed that it was not liable to pay interest under s. 216 but also claimed that it was entitled to interest under s. 214. In the context in which the third question has been raised, the counsel are agreed that the question requires to be answered in the affirmative and in favour of the assessee.

The question is so answered.

No order as to costs.