Commissioner of Income Tax- II vs State Bank of Indore

Heard Mr. R.L. Jain, learned senior counsel with Ms. Veena Mandlik, Counsel for the appellant/Revenue. These three appeals are directed against the order dated 15.12.2006 passed by the ITAT in ITA No. 1135, 1136 and 1137/IND/1996 for the assessment years 1982-83, 1985-86 and 1986-87 by which ITAT has held that in the case of tax deducted at source, it will partake the character of advance tax and if the assessee on assessment made by the Assessing Officer, becomes entitled to refund of the amount of tax, the interest on the exemption of the amount shall be payable from the date of the deposit.

Learned senior counsel for the appellant/Revenue has invited attention to the decision of the Supreme Court in Modi Industries Limited, Modinagar and Others Vs. Commissioner of Income Tax, Delhi and Another, with regard to the meaning of assessment. There Lordships have held that the assessment implies "regular assessment" made u/s 1143 /144 of the income tax Act. It has further been observed that once amount of advance tax is treated as payment of tax in respect of income of the relevant previous year and credit as such or the amount has been to the assessee in the assessment order, the amount loses its character of advance tax and becomes income tax paid in respect of the income of the relevant previous year. The interest on such income is payable u/s 214 on the excess amount standing to the credit of the assessee up to the year of the assessment.

Learned counsel submits that after considering the ratio of the said case, a Division Bench of this Court in Commissioner of Income Tax Vs. D and H Secheron Electrodes Pvt. Ltd., has taken the view of that assessee was entitled to interest u/s 214 read with section 244(1A) of the Act but the "regular assessment" would mean only the original assessment and not the last operative order for the assessment made pursuant to the appellate or revisional order.

On reading the said judgment of this Court in the backdrop of the ratio of the decision of the Supreme Court in Modi Industries (supra), we do not find that any inconsistent view has been expressed by this court in D&H Secheron''s case (supra). Since the tax deducted at source is also an advance tax, on refund the assessee would be entitled to interest thereon from the relevant date. In this view of the matter, we do not find that these appeals raise any question of law requiring decision of this Court. The appeals are dismissed summarily.