Commissioner Of Income Tax v. Mihir Textiles Ltd

O/ITR/6/2003 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE NO. 6 of 2003 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ?the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ?to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX....Applicant(s) Versus MIHIR TEXTILES LTD.....Respondent(s) ================================================================ Appearance:Appearance: MR MR BHATT, SENIOR COUNSEL WITH MRS MAUNA M BHATT, ADVOCATE for the Applicant(s) No. 1 SERVED BY AFFIX(N) for the Respondent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 07/11/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1.The following question has been referred by the Income Tax Appellate Tribunal, Ahmedabad under Section 256(1) of the Income Tax Act, 1961 arising out of the Tribunal’s order dated 04.06.1993 in ITA No. 5509/Ahd/1989 for the Assessment Year 1984-85: “Whether, the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to grant interest u/s . 214 while giving appeal effect to the CIT(A) order?” 2. The Assessing Officer while giving appeal effect to the CIT(A)’s order did not grant interest u/s 214 of the Act. On appeal, the CIT(A) directed the A.O to grant interest u/s. 214 upto the date of CIT(A)’s order. The revenue appealed the same before the Tribunal and the Tribunal relying on the Full Bench decision of this Court in the case of Bardolia Textile Mills Ltd. reported in 151 ITR 389 confirmed the decision of the CIT(A) and dismissed the appeal. The Hon’ble Supreme Court of India vide order dated 02.05.1994 directed the Tribunal to draw up a statement of Case and refer the question of law stated in the said order to this Court and accordingly this reference has come before us for consideration. 3.Mr. M.R. Bhatt, learned Senior Advocate appearing with Ms. Bhatt for the appellant – revenue submitted that the Tribunal has erred in law in directing the Assessing Officer to grant interest u/s 214 till the date of CIT(A) order. He has drawn the attention of this Court to the decision of the Honble Supreme Court in the case of Modi Industries Ltd. and Others vs. Commissioner of Income Tax and Another reported in [1995] 216 ITR 759 as well as a decision of this Court in the case of Commissioner of Income Tax vs. Mihir Textiles Ltd reported in [2000] 243 616 and submitted that the issue involved in the present reference is squarely governed by the said decisions where the Apex Court has taken a view that the assessee shall be entitled to interest on refund amounts up to the date of regular assessment. 4.The issue involved in the present Tax reference is now not res integra in view of the decision of the Honble Supreme Court in the case of Modi Industries Ltd. and Others vs. Commissioner of Income Tax and Another reported in [1995] 216 ITR 759 as well as a decision of this Court in the case of Commissioner of Income Tax vs. Mihir Textiles Ltd reported in [2000] 243 616. The Apex Court in the case of Modi Industries (supra) has observed that 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 section 214 up to the date of regular assessment. This Court in the case of Mihir Textiles (supra) relying upon the decision of the Apex Court in the case of Modi Industries (supra) observed that interest is admissible to the assessee up to the date of regular assessment under section 214. 5. Having heard Shri Bhatt, learned Counsel appearing on behalf of the revenue and the question posed for consideration by us reproduced hereinabove and considering the decision of the Honble the Supreme Court in the case of ModiIndustries(Supra) and this Court in the case of Mihir Textiles (supra), the question, which is raised in the present reference is required to be answered in favour of the revenue. The assessee shall be entitled to interest on refund amounts up to the date of regular assessment. We are not giving any elaborate reasons for the same as in the case of Mihir Textiles(Supra) it is held by this Court that the assessee shall be entitled to interest on refund amounts up to the date of regular assessment. 6.In view of the above, we hold that the assessee shall be entitled to interest on the refund amount up to the date of regular assessment and accordingly the question raised for consideration is answered in the negative and in favour of the revenue. Consequently, the impugned judgment and order passed by the ITAT is modified. Hence, the present reference is partly allowed. (K.S.JHAVERI, J.) (K.J.THAKER, J) divya O/ITR/6/2003 JUDGMENT