V.P. Elhence, Judicial Member - (1.)THESE cross appeals arise out of the consolidated order dated 9.1.1987 of the learned Commissioner of Income-tax (Appeals), New Delhi for the assessment years 1973-74, 1974-7S and 1975-76.
(2.)The assessee is a limited company. The common question involved in these appeals relates to the allowability of interest under Section 244(1 A) of the Income-tax Act, 1961 in respect of payments made before and after 31.3.1975 which were adjusted in assessments framed after 31.3.1975. The facts are not in dispute and can be conveniently expressed as follows:-
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The assessee filed applications under Section 154 requesting that it be allowed interest under Section 244(1A) with reference to the amounts of TDS, advance tax and self-assessment tax. However, the Income-tax Officer rejected the assessee's claim observing that no part of the refund could be said to be due to the assessee "as a result of any amount having been paid after 31.3.1975 in pursuance of assessment order and such amount or any part thereof having been found in appeal under the Income-tax Act, 1961 to be in excess of amount which the assessee was allowable to pay as tax." However for the assessment year 1974-75, he held that only an amount of Rs. 5,238 was due to the assessee as interest under Section 244(1A) on account of payment of Rs. 1,74,662 (refund for the A. Y. 1971-72 adjusted on 18.12.1978 against the total demand created on 1.3.1978). This amount of Rs. 5,238 was refunded to the assessee on 24.5.1979.

Against the said orders, the assessee came up in appeal before the learned Commissioner of Income-tax (Appeals). The learned CIT(A) held that in view of the binding decision of the jurisdictional High Court of Delhi in the case of National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India [1981] 130 ITR 928 the assessee's claim for interest with regard to advance tax paid prior to 31.3.1975 but adjusted in an assessment made after the aforesaid date was to be allowed by the Income-tax Officer. However, so far as payment of tax by way of TDS and payment of self-assessment tax under Section 140A is concerned, he held that if such payments took place before 31.3.1975, no interest was allowable under Section 244(1A).

(3.)THE assessee has come up in appeals for the assessment years 1973-74 and 1974-75. It has obviously not come up in appeal for the assessment year 1975-76 for which the tax deducted at source as well as self-assessment tax were paid after 31.3.1975. However, the department has come up in appeal for all the three assessment years. Shri M.L. Gupta, the learned counsel for the assessee strongly relied on the provisions of Sections 140A, 199,219 and 244(1 A). He pointed out that the view taken by the Delhi High Court in the case of National Agricultural Co-operative Marketing Federation of India Ltd. (supra) was also taken by the Punjab & Haryana High Court in the case of CIT v. Leader Engg. Works [1989] 178 ITR 529. He also referred to a Third Member decision of the Appellate Tribunal in the case of Phelps & Co. (P.) Ltd. v. ITO [1988]25 ITD 96 (Delhi) (TM). Lastly he reiterated the reliance on the following decisions of the Tribunal which had been cited before the learned Commissioner of Income-tax (Appeals) as well:-
(1) ITO v. Leader Engg. Works;

(2) H. V. Mirchandani v. First ITO [1983] 4 ITD 353 (Bang.)

(3) 1983 Tax Referencer Vol. 3-252.

(4) Smt. K. Mahalakshmamma v. ITO [1984] 7 ITD 180 (Hyd.)

(5) ITO v. J.K. Synthetics Ltd. [1984] 8 ITD 601 (Delhi).

On the other hand, Shri Puneet Gangal, the learned Departmental Representative strongly relied upon the orders of the Income-tax Officer for these years.