M.KATJU,J. - (1.) THIS writ petition has been filed praying for quashing of the order, dt. 7th Sept., 1998 (Annexure 7 to the petition), and the demand notice dt. 30th March, 1995 (Annexure 4 to the petition), in respect of interest under ss. 234A and 234B of the IT Act, 1961, and for a mandamus restraining the respondents from realising interest under those sections. It has further been prayed that the petitioners Appeal No. nil of 1995, be disposed of within a reasonable time.
(2.) HEARD Sri V.B. Upadhyaya and Sri R.N. Singh, learned counsel for the petitioner, as well as learned counsel for the Department. The petitioner is a company registered under the Indian Companies Act. It is a non -banking finance company controlled by the Reserve Bank of India. Its business is akin to that of a commercial bank and it accepts deposits, and invests the funds in hire purchase business. For the asst. year 1989 -90, it filed a return showing loss of Rs. 62,510 including set off of earlier losses of Rs. 49,113. The assessment for that year was completed on 18th Feb., 1992, under S. 143(3) on a net loss of Rs. 7,133. A true copy of the assessment order has been annexed as Annexure 1 to the petition. For the asst. year 1990 -91, it showed a total loss of Rs. 46.940 and the assessment was completed on 25th Feb., 1993. The AO determined the income of the assessee on income of Rs. 9,74,930 after making addition of Rs. 7,08,616 and allowed absorbed loss of the previous assessment year at Rs. 49,113 creating a demand of Rs. 5,11,713 consisting of income of Rs.
(3.) ,37,355 plus interest of a sum of Rs. 43,740 under S. 234A and Rs. 30,618 under S. 234B. A true copy of the assessment order dt. 25th Feb., 1993, is annexed as Annexure 2 to the petition. 4. The assessee filed an appeal against the assessment order dt. 25th Feb., 1993, before the CIT (A) which was partly allowed vide order dt. 15th March,1995, granting relief of Rs. 29,216 and directing the AO to verify the facts of additions of Rs. 29,178 on account of accrued interest on FDRs of bank. A true copy of the order of the CIT(A) dt. 15th March, 1995, is Annexed as annexure 2 to the petition. In compliance with the order dt. 15th March, 1995, the AO by the order dt. 30th March, 1995, granted relief of Rs. 58,533 and assessed taxable income at Rs. 6,16,400. A true copy of the order dt. 30th March, 1995, is annexed as Annexure 3 to the petition. The AO then issued demand notice under S. 156 along with interest under S. 220(2). The details of the same are given in para. 9 of the petition. A true copy of the demand notice dt. 30th March, 1995, is annexed as Annexure 4 to the petitioner. The assessee -company filed an appeal against the order of the CIT (A) dt. 15th March, 1995, before the Tribunal vide Annexure 5 to the petition and this appeal is still pending before the Tribunal at New Delhi. The assessee -company also moved an application under S. 154 before the AO on 22nd Dec., 1997, for rectification of the mistake, particular in respect of the interest on advance tax under ss. 234A and 234B and also regarding interest on advance tax for changing the amount which was shown in the earlier order without giving opportunity to the petitioner. A true copy of the said application is annexed as Annexure 6 to the petition. This application was rejected on 7th Sept., 1998, vide Annexure 7 to the petition.;