Commissioner of Income Tax vs Oswal Woollen Mills Ltd.

The assessee, a private limited company, filed its return for the accounting period ending December 31, 1974, declaring an income of Rs. 25,01,300. On the assessment made, the assessee became entitled to a refund out of the advance tax paid, but the Income Tax Officer did not allow interest on the plea that advance tax was not paid within the stipulated period and that the refunds were not granted as a result of regular assessment. On appeal by the assessee, the Commissioner of Income Tax reversed the order of the Income Tax Officer and allowed interest u/s 214 of the Income Tax Act (for short, called "the Act") on the total amount of refund. The Revenue having failed in the appeal before the Tribunal, made an application u/s 256(1) of the Act for referring the following questions which was also dismissed.

"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding the Commissioner (Appeals) order allowing interest u/s 214 in spite of the fact that the advance payments had been made beyond the stipulated dates as provided u/s 211 of the Income Tax Act, 1961 ?

(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding that the assessee was entitled for interest u/s 214 even on the amount of refunds allowed to it as a result of appellate and rectificatory orders passed after the regular assessment ?

(3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding the C. I. T. (A)''s order allowing interest u/s 244(1A) in respect of the amounts refunded to the assessee out of the advance tax paid before March 31, 1975 ?

(4) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding the C. I. T. (A)''s order allowing interest under Sections 214 and 244(1A) ignoring the fact that the issue involved being controversial could not be covered u/s 154 ?"

Thereafter, the Revenue moved this application u/s 256(2) of the Act for a mandamus to the Tribunal to get the said questions referred.

Question No. 1 was not pressed by learned counsel for the Revenue in view of the decision of this court in Commissioner of Income Tax Vs. Rohtak Delhi Transport P. Ltd., . So far as question No. 2 is concerned, it is not disputed by learned counsel for the assessee that it is a question of law, but he urged that the same having been settled by the Supreme Court, it need not be got referred. According to learned counsel, the Bombay Income Tax Tribunal had taken a view similar to the one taken by the Tribunal in this case. The Bombay High Court refused to issue a mandamus to get the question referred and SLP against the order of the High Court was dismissed by the Supreme Court, which necessarily means that the view of the Bombay Tribunal was affirmed. The SLP was dismissed in limine without passing a speaking order. As held by a recent Full Bench of the Patna High Court in Commissioner of Income Tax Vs. Sheo Kumari Debi, and a Division Bench of the Gujarat High Court in Commissioner of Income Tax Vs. Indradaman Amratlal, refusal to grant leave to file appeal by the Supreme Court does not ipso facto mean that the judgment sought to be appealed against is confirmed as to its ratio and/or the conclusions, particularly when there is no speaking order. This court has already taken a view contrary to the view of the Tribunal in Commissioner of Income Tax Vs. Ambala Electric Supply Co. Ltd., . The Tribunal, therefore, erroneously refused to refer this question to this court and its order has to be reversed.

Although question No. 3 is again a question of law, but the answer to this question being obvious in view of the provisions of Section 219 of the Act, this question as well need not be got referred.

The point relating to the subject-matter of question No. 4 was never raised before the Tribunal and, as such, does not arise from its order.

In view of the findings recorded above, a mandamus is issued to the Tribunal to refer only question No. 2 together with the statement of the case to this court for its opinion. No costs.