Commissioner of Income Tax vs Mohta Constructions Co.

B.R. Arora, J.—The Income Tax Appellate Tribunal, Jaipur Bench, Jaipur, for the assessment years 1985-86 and 1986-87, in the case of the assessee, has referred the following question of law for the opinion of this court :

" Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally justified in directing to allow interest u/s 214 on the excess amount of tax deducted at source u/s 194C of the Income Tax Act, 1961 ?"

An identical controversy on identical facts came up for consideration before the Division Bench of this court in CIT v. Hindustan Engineering Co. [1995] 215 ITR 527 and the Division Bench answered the question in the negative, i.e., in favour of the Revenue and against the assessee, by holding that (page 529) "Sub-Section (2) of Section 214 of the Act is not applicable to the refunds from amounts deducted at source. It speaks of any portion of such amount which is refunded under this Chapter. The word ''such'' refers to Sub-section (1) of Section 214 dealing with advance payment of tax and not with tax deducted at source".

The same view has also been taken in Lord Krishna Bank Ltd. Vs. Income Tax Officer and Others,

For the same reasons given in CIT v. Hindustan Engineering Co. [1995] 215 ITR 527, this reference is answered in favour of the Revenue and against the assessee and it is held that the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur, was not legally justified in directing to allow interest u/s 214 on the excess amount of tax deducted at source u/s 194C of the Income Tax Act.

A copy of this judgment/order may be sent to the Registrar, the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur, as required u/s 260 of the Income Tax Act.