A.N. Verma, J. - (1.) THIS petition furnishes a revealing instance of how an assessee has been kept deprived of his legitimate claim for interest admittedly due to him under Sections 214 and 244(1A) of the Income-tax Act, 1961. The petitioner has had to fight for his claim at every step and it was not until the court intervened that the authorities moved in the matter. It is sad that the authorities responsible for refund of the amounts due to the petitioner as a direct consequence of orders passed by the Income-tax Appellate Tribunal denied the refund and the interest thereon without even a semblance of justification.
(2.) THESE are the facts. For the assessment year 1979-80, the petitioner was assessed to tax on a total income of Rs. 32,50,140. An appeal against the assessment order filed by the assessee having been dismissed by the Commissioner of Income-tax (Appeals), the assessee preferred a further appeal before the Income-tax Appellate Tribunal, Allahabad, which by its order dated November 29, 1985, allowed the same and held that the order of assessment suffered from a manifest error which the Income-tax Officer was bound to rectify. The Tribunal worked out the refund, as a consequence from the rectification ordered by it, at Rs. 64,923. The petitioner was, thereafter, paid the refund of the aforesaid amount and was also granted interest thereon under Section 243 of the Income-tax Act, 1961. As no interest was allowed to the petitioner by the Assessing Officer under sections 214 and 244(1A), the petitioner filed an objection under Section 154 for the rectification of the order. The Assessing Officer did not decide the application whereupon the petitioner was constrained to file a petition in this court, being Writ Petition No. 338 of 1987, which was allowed on November 6, 1989. The petition was disposed of with a direction to the Assessing Officer to consider and dispose of the petitioner's application. By an order dated December 4, 1989, the application was dismissed. Thereupon the petitioner filed an appeal which was allowed by the Commissioner of Income-tax (Appeals) by an order dated October 15, 1990, directing the Assessing Officer to decide the petitioner's application afresh for the grant of interest payable on refund under Sections 214 and 244(1A), The Assessing Officer was unmoved. He again rejected the claim of the petitioner but, fortunately for the petitioner, his claim for interest was allowed by the Commissioner of Income-tax (Appeals) by his order dated December 18, 1984, holding that the petitioner was clearly entitled to interest under those provisions and directing the Assessing Officer to compute the interest thereon and pay the same to the petitioner. There was still no end to the petitioner's troubles. The Assessing Officer, finding that the Department had gone up in appeal before the Income-tax Appellate Tribunal, Delhi Bench, against the order of the Commissioner of Income-tax (Appeals), sought and was granted approval of the Commissioner to withhold the refund for two months after the decision of the appeal by the Tribunal. Exasperated by the intransigence of the Assessing Officer, the petitioner approached this court yet again for a writ of mandamus to the Assessing Officer to do what was his clear duty, that is, to give effect forthwith to the order of the Commissioner of Income-tax (Appeals), New Delhi, dated January 28, 1991, whereby the Assessing Officer had been asked to make the payment of interest to the petitioner on the amount of Rs. 9,64,923 under Sections 214 and 244(1A). The amount of interest worked out to no mean sum--Rs. 7,56,760. The hearing of the petition was deferred from time to time to enable learned standing counsel to find out whether the Income-tax Appellate Tribunal, New Delhi, has disposed of the Department's appeal. Happily for the petitioner, the Department's appeal was dismissed by the Tribunal by its order dated October 25, 1991. Even after the expiry of two months of this order, the petitioner continues to be denied the benefit of interest, unarguably due to him, under Sections 214 and 244(1A) of the Income-tax Act.
(3.) SRI Bhupeshwar Dayal, learned counsel for the respondent, could not, and in our opinion rightly so, dispute the claim of the petitioner for payment of interest under Sections 214 and 244(1A) accruing as a direct consequence of the order passed by the Income-tax Appellate Tribunal whereunder the petitioner became entitled to the refund of Rs. 9,64,923. The only submission advanced by him in opposition to the petition was that this court had no jurisdiction to entertain this petition under Article 226 of the Constitution as the direction prayed for by the petitioner is against the Assistant Commissioner of Income-tax (Central Circle-25), New Delhi, who is an authority based outside the jurisdiction of this court. To support his contention, learned counsel placed reliance on a few decisions of this court and of the Supreme Court which we shall presently advert to. For a decision on the respondent's objection, it will be convenient to have a look at Clause (2) of Article 226 of the Constitution which provides : "(2) The power coferred by Clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories." The issue will, therefore, turn entirely on whether the cause of action or any part thereof on which the petitioner is claiming a direction from this court arose within the territories of this State. The relief claimed is a direction to the respondent, the Assessing Officer, to pay interest to the assessee on the amount of refund which became due to it under Sections 214 and 244(1A) in consequence of the order dated November 29, 1985, passed by the Income-tax Appellate Tribunal, Allahabad Bench, holding the assessee to be entitled to the refund of Rs. 9,64,923. Sub-section (1A) of Section 244 of the Income-tax Act, to the extent relevant for our purposes, provides : " (1A) Where the whole or any part of the refund referred to in Sub-section (1) is due to the assessee, as a result of any amount having been paid by him after March 31, 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-section (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." ;