Ajit K.Sengupta, J. - (1.) In this reference under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1981-82, the following question of law has been referred : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the Commissioner of Income-tax (Appeals) directing the Inspecting Assistant Commissioner to accept the rectification petition of the assessee and to allow the assessee interest under Section 214 of the Income-tax Act, 1961 ?"
(2.) The brief facts of the case are that the assessee, Messrs. Orient Paper and Industries Ltd., is a resident company and the assessment year involved is 1981-82 for which the accounting period ended on March 31, 1981. The income-tax assessment for the assessment year 1981-82 was completed under Section 143(3) of the Income-tax Act, 1961, on February 20, 1984. Since the assessment in question resulted in a refund, the Assessing Officer granted interest under Section 214 to the assessee up to the date of assessment to the tune of Rs. 1,17,710. Therefore, the assessee filed a petition under Section 154 of the Income-tax Act, 1961, dated July 4, 1985, praying for the grant of interest under Section 214 ibid up to the date of the order giving effect to the appellate order. The Assessing Officer rejected the said petition under Section 154 of the Income-tax Act, 1961, filed by the assessee holding that interest under Section 214 ibid was correctly granted to the assessee on the amount by which the aggregate of advance tax paid exceeded the tax determined on regular assessment made under Section 143(3) of the Act and, as such, there was no mistake apparent from record.
(3.) Being aggrieved, the assessee brought the issue before the Commissioner of Income-tax (Appeals) and it was held by the Commissioner of Income-tax (Appeals) that the decision of this court in the case of Chloride India Ltd. v. CIT [1977] 106 ITR 38 has become the law of the territory under its jurisdiction. The Assessing Officer should have allowed interest under Section 214 of the Income-tax Act, 1961, in accordance with the principles laid down in the case of Chloride India Ltd. Since this has not been done, the action of the Assessing Officer has to be considered as a mistake apparent from the record. Thus, the Commissioner of Income-tax (Appeals) directed the Assessing Officer to accept the rectification petition of the assessee and allow interest under Section 214 in accordance with the principles laid down in the case of Chloride India Ltd.;