Madras H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to interest under s. 18 of the Surtax Act r/w s. 244(1A) of the IT Act, 1961, on the overpayment of the self-assessment tax paid by the assessee ?

High Court Of Madras

CIT vs. Ashok Leyland Ltd.

Sections 244(1A), Surtax 18

Asst. Year 1976-77

R. Jayasimha Babu & A.K. Rajan, JJ.

Tax Case No. 175 of 1993

4th October, 2001

Counsel Appeared

Mrs. Chitra Venkataraman, for the Revenue : P.P.S. Janarthana Raja, for the Assessee

JUDGMENT

A.K. RAJAN, J. :

The question that has been referred for our consideration is :

“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to interest under s. 18 of the Surtax Act r/w s. 244(1A) of the IT Act, 1961, on the overpayment of the self-assessment tax paid by the assessee ?”

For the asst. yr. 1976-77, the surtax liability was determined at Rs. 56,00,940. After giving credit to the pre- assessment tax paid by the assessee, the assessment resulted in a refund of Rs. 3,40,366. The AO did not allow the assessee interest under s. 18 of the Surtax Act r/w s. 244(1A) of the IT Act, 1961. Hence, an appeal has been filed by the assessee.

In the case reported in Modi Industries Ltd. vs. CIT (1995) 128 CTR (SC) 361 : (1995) 216 ITR 759 (SC) : TC S.4.369, the Supreme Court has held that s. 214 provides for payment of interest to an assessee on the excess amount of advance tax paid. After adjustment of advance tax at the time of regular assessment, if some balance remains to the credit of the assessee, that balance is treated as excess amount of advance tax which has to be refunded with interest under s. 214.

Therefore, this question is answered against the Revenue and in favour of the assessee.

[Citation : 254 ITR 641]

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