B.N.PATNAIK, J. - (1.)THE petitioner, while challenging Ext. P6 order dt. 30th Sept., 1991 passed by the CIT, Cochin 2nd respondent in R.P. No. 203/89 90/L, prays for a declaration that the petitioner company is entitled to interest under S. 244(1A) of the IT Act, 1961 on the excess amount adjusted from advance tax paid by the petitioner and treated as tax paid persuant to the order of assessment and became refundable to the petitioner consequent to the appellate orders.
(2.)THE petitioner is a company and is an assessee under the IT Act, 1961. For the asst. year 1979 80, the assessee paid a total sum of Rs. 4,55,781 prior to the order of assessment as advance tax and tax deducted at source, on 15th March, 1979 and 24th March, 1979. By the original assessment order dt. 22nd Sept., 1982, total tax payable was assessed at Rs. 9,24,880. The entire balance amount of tax was also paid. On appeal, the tax liability was reduced to Rs. 5,78,044. A sum of Rs. 2,16,538 became refundable to the petitioner. On an application of the petitioner dt. 30th April, 1986, a sum of Rs. 1,24,478 was granted as interest under Ss. 244(1A) and 214(1) of the IT Act. Again on a further appeal to the Tribunal, the assessment order for the year 1979 80 was revised on 22nd Sept., 1988 determining the tax liability at Rs. 3,56,504. After adjusting the tax paid by the petitioner, a net amount of Rs. 32,780 was refunded being excess collection. Against the total advance payment effected by the petitioner during the accounting period 1978 79 amounting to Rs. 4,55,781, the tax liability fixed by the Tribunal being only Rs. 3,56,504, an excess amount of Rs. 99,277 became refundable. But the assessing authority did not consider the claim for interest under S. 244(1A) on this sum. Hence a revision petition was filed before the CIT. But, the CIT, by the impugned order (Ext. P6), dismissed the claim of interest. It is contended by the petitioner that under S. 214 of the IT Act, the Central Government is liable to pay simple interest at 15% on the excess advance tax paid by an assessee from the 1st day of April next following the said financial year to the date of the regular assessment. Sec. 219 of the Act creates a fiction by which the amount of advance tax paid by an assessee is treated and deemed as payment of tax in respect of the income for the period which would be the previous year for assessment for the assessment year next following the financial year in which it was payable. The respondents, therefore, ought to have held that the advance tax paid lost its identity the moment it was adjusted towards the tax liability created under the regular assessment and took the shape of payment of tax in pursuance of the order of assessment. While considering the claim, it is contended that the second respondent CIT proceeded as if the petitioner is claiming interest on the excess advance tax paid. The case of the petitioner is that it is entitled to interest on the amount adjusted from advance tax and treated as payment of tax pursuant to the order of assessment which became refundable consequent to the appellate orders.
In the counter affidavit filed by the first respondent, it is stated inter alia that the claim of interest under S. 244(1A) by the petitioner is not maintainable in view of the decision of this Court in K.A. Karim & Sons vs. CIT (1990) 186 ITR 97 (Ker). It has been observed in that decision that in order to claim interest under S. 244(1A), the assessee should establish that he paid the tax pursuant to the demand raised on an assessment or paid the penalty in terms of an order levying penalty. His further contention is that the provisions of S. 244(1A) of the Act as interpreted by the Punjab & Haryana and the Delhi High Court are under challenge before the Supreme Court and the decision therein cannot be relied upon.

(3.)SEC . 244(1A) of the IT Act, 1961 lays down as follows :
"244(1A). Where the whole or any part of the refund referred to in Sub S. (1) is due to the assessee, as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in Sub S. (1) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted."

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