R.K. Jain and Sons vs Commissioner of Income Tax

This writ petition was originally filed as the refund of the excess Advance Tax was made to the petitioner. During the pendency of the writ petition, the refund was made along with interest thereon. There is no dispute with regard to that. The only dispute which survives is that of interest on interest.

Learned counsel for the petitioner has pointed out that though as per the statute there is no provision for payment of interest on interest, however, the Supreme Court in the case of Commissioner of Income Tax Vs. Narendra Doshi, awarded interest on interest and has accepted the principle laid down in the decision of the Gujarat High Court in D.J. Works Vs. Deputy Commissioner of Income Tax, which was subsequently followed by the Gujarat High Court in Chimanlal S. Patel Vs. Commissioner of Income Tax and Another, . The latter decision of the Gujarat High Court has considered the very provisions which are in question in the present writ petition.

Following the decision of the Supreme Court, we feel that the petitioner is entitled to succeed on this aspect and accordingly we direct that interest on interest be also paid by the respondents to the petitioner. The writ petition is accordingly disposed of.