Calcutta H.C : Whether, on the facts and in the circumstances of the case and having regard to the fact that the payment of interest to the assessee under s. 214 of the IT Act, 1961, up to the date of giving effect to the appellate order is a debatable point, the Tribunal was justified in holding that the assessee’s application under s. 154 of the Act to the ITO was quite maintainable ?

Counsel Appeared

H. M. Dhar, for the Revenue

BHAGABATI PRASAD BANERJEE J.:

The following two questions of law have been referred to this Court by the Tribunal under s. 256(1) of the IT Act, 1961 ( “the Act”) :

“1. Whether, on the facts and in the circumstances of the case and having regard to the fact that the payment of interest to the assessee under s. 214 of the IT Act, 1961, up to the date of giving effect to the appellate order is a debatable point, the Tribunal was justified in holding that the assessee’s application under s. 154 of the Act to the ITO was quite maintainable ?

2. Whether, on the facts and in the circumstances of the case and on a correct interpretation of s. 2(40) of the Act, the Tribunal was justified in holding that the regular assessment as contemplated in s. 214 of the Act included the order of the ITO giving effect to the orders of the appellate authorities and in that view interest under s. 214 was payable to the assessee for the period up to the date of giving effect to the appellate orders instead of up to the date of passing the first assessment order under s. 143(3)/144 of the Act ?”

2. The question is whether the rectification proceedings would have effect so as to give interest to the assessee under s. 214 of the Act up to date of giving effect to the order of the appellate Court. Sec. 214 provides for allowing interest to the assessee in the contingencies mentioned in that section. Sec. 214(1), inter alia, provides that on regular assessment from the 1st day of April, next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year during which it is payable by reason of the provisions of s. 213 of the Act interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of regular assessment. The meaning of the words “regular assessment” has been the subject-matter of issue in various forums. The definition of the words “regular assessment” has been given in s. 2(40) of the Act which is as follows : “(40)`regular assessment’ means the assessment made under s. 143 or s. 144 ;”

3. But the question is whether this definition can be extended to include assessments made to give effect to appellate orders is not very clear. This is a point on which there may possibly be two opinions and it is very difficult to give a correct interpretation of the section. Therefore, in our view, when the meaning of the expression “regular assessment” is in dispute, the rectification proceedings would not have started for granting in the consequential order passed by the ITO after the appellate proceedings.

4. Question No. 1 is, therefore, answered in the negative and in favour of the Revenue.

5. In view of the answer given to the first question, the second question need not be answered.

6. There will no order as to costs.

SUHAS CHANDRA SEN J.:

In agree.

[Citation : 201 ITR 445]