COMMISSIONER OF INCOME-TAX VS NARENDRA DOSHI
2004 P T D 2128
[254 I T R 606]
[Supreme Court of India]
Present: S. P. Bharucha, Y. K. Sabharival and Brijesh Kumar, JJ
COMMISSIONER OF INCOME‑TAX
Versus
NARENDRA DOSHI
Civil Appeal No.2053 of 2000, decided on /01/.
th
July, 2001. (Appeal from the judgment and order, dated May 3, 1999 of the Madhya Pradesh High Court (Indore Bench) in I.T.R. No. 5 of 1996).
Income‑tax‑‑‑
‑‑‑‑Advance tax‑‑‑Refund of excess paid‑‑‑Interest‑‑‑Government liable to pay interest on interest on advance tax wrongfully withheld‑‑‑Indian Income Tax Act, 1961, S.214(1).
Held, that, since the Appellate Tribunal, whose decision the High Court had affirmed, had relied upon the decision of the Gujarat High Court in D.J. Works v. Deputy CIT (1992) 195 ITR 227, to the effect that the Revenue was liable to pay interest on the amount of interest on advance tax which it should have paid to the assessee but has unjustifiably failed to do so, and that decision was followed by the Gujarat High Court in Chimanlal S. Patel v. CIT (1994) 210 ITR 419, and the Department had not challenged the correctness of those two decisions of the Gujarat High Court, the Revenue was bound by the principle laid down therein.
D.J. Works v. Deputy CIT (1992) 195 ITR 227 (Guj.) and Chimanlal S. Patel v. CIT (1994) 210 ITR 419 (Guj.) impliedly approved.
R.P. Bhatt, Senior Advocate Lakhsmi Iyengar, B.V. Balaram Das and Ms. Sushma Suri, Advocates for Appellant.
Krishnanand Pandey, Advocate for Respondent.
ORDER
The question that the High Court was called upon to answer read thus:
"Whether, on the facts and in the circumstances of the case, the Income‑tax Appellate Tribunal was justified in law in upholding the order of the Deputy Commissioner of Income‑tax (Appeals), Indore, directing to allow interest on interest when the law points for grant of simple interest only?"
It answered it in the affirmative and in favour of the assessee, relying upon the judgments which laid down that interest was payable on the excess amount paid towards income‑tax.
The Tribunal, whose decision the High Court affirmed, had relied upon the decision of the Gujarat High Court in the case of D.J. Works v. Deputy CIT (1992) 1995 ITR 227, which had been followed by the same High Court in Chimanlal S. Patel v. CIT (1994) 210 ITR 419. These decisions hold that the Revenue is liable to pay interest on the amount of interest which it should have paid to the assessee but has unjustifiably failed to do.
The Revenue has not challenged the correctness of the two decisions of the Gujarat High Court. They must, therefore, be bound by the principle laid down therein. Following that principle, the question has, as we find, been rightly answered in the affirmative and in favour of the assessee.
The civil appeal is dismissed.
No order as to costs.
M.B.A./1099/FCAppeal dismissed.