GENERAL FIBRE DEALERS LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) In this matter, I had delivered judgment on 24th & 28th November, 1977, but before I could sign the judgment, learned advocate for the petitioner submitted that he wanted to make some further submissions. Accordingly, I recalled the judgment and heard learned advocates for both sides on certain points.

(2.) The General Fibre Dealers Ltd. filed their return of income under the I.T. Act, 1961, for the assessment year 1966-67 on or about 8th of August, 1966. In the said return, the said firm, which is the petitioner herein, declared an income of Rs. 9,54,582. The petitioner-company claimed set-off of the loss of Rs. 5,80,331. The ITO on or about 18th of August, 1970, assessed the total income to be Rs. 3,53,568. The tax payable was determined at Rs. 2,29,574. The petitioner-company had paid advance tax of Rs. 3,43,160. In the premises, a sum of Rs. 1,13,588 became refundable to the, petitioner. The ITO, accordingly, allowed interest on this sum under Section 214(1) of the I.T. Act, 1961. The assessee, the petitioner herein, preferred an appeal from the order of the assessment. The AAC, on or about 13th December, 1972, allowed in part the appeal. He reduced the total income by Rs. 2,15,915. The AAC directed that assessment be revised by the ITO. On 21st of December, 1972, the ITO passed an order reducing the total assessed income to Rs. 97,229 on the basis of the order of the AAC, The tax payable was thus Rs. 56,228. The ITO, however, did not allow interest on the difference between the advance tax paid and the tax payable according to the revised order. On the 13th of March, 1973, an application was made to the ITO for rectification under Section 154 of the I.T. Act, 1961. On 21st of July, 1973, the rectification application was rejected on the ground that the regular assessment under s, 214(1) of the I.T. Act, 1961, meant assessment under Section 143 of the Act. Thereafter, an appeal was preferred against the order of the ITO to the AAC. The AAC took the same view. An appeal was thereafter preferred from the order of the AAC to the Tribunal. By the order dated 31st of May, 1975, the Tribunal held that this was not a fit case under Section 154 of the I.T. Act, 1961, as there could reasonably be two views possible on the controversy.

(3.) An application was made, thereafter, under Section 256 of the Act to the Tribunal for referring the question to the High Court. On the 11th of December, 1975, the Tribunal rejected the application on the ground that no question of law was involved. On the 6th of May, 1976, the petitioner moved this court under Article 226 of the Constitution and obtained this rule nisi.