ASHIM KUMAR BANERJEE,J. - (1.) SUBJECT controversy: 1. Both the appellants were assessees under the Income -tax Act, 1961 (hereinafter referred to as the said 'Act'). By virtue of the order of the appellate authority being the Commissioner of Income -tax (Appeals) they got the refund of a part of the tax paid and/or deposited through tax deducted at source (TDS). Subject controversy was with regard to payment of interest. The assessee claimed interest on such refund because of delayed payment. Such prayer was rejected by the authority on the ground that interest was not payable in terms of Section 244A(4) of the said Act. The order of refusal of payment of interest on such refund was challenged in a writ petition which was dismissed by the learned single judge. The order of dismissal by the learned single judge was impugned in this writ petition. The learned single judge held, inter alia, as follows: After hearing the parties and after analysing the decisions cited before me by the learned advocates appearing on behalf of the parties I do not have any hesitation to hold that as has been held by the High Courts that there is no enabling provision in the Act to direct payment of interest on the tax deducted at source. As has been submitted by the learned advocate appearing on behalf of the respondent authority I do not have any hesitation to endorse the same view as has been expressed by the different High Courts. I also do not have any hesitation to accept the contention of the learned advocate appearing on behalf of the respondent authority and in my opinion, at the relevant assessment year, there is no specific provision conferring any right upon the assessee to get interest on the excess amount paid by way of tax deducted at source. The differential treatment had been set at rest after enactment of the provisions of Section 244A which became effective and applicable from the assessment year 1989. Such section cannot be interpreted in such a manner which would enable the assessee to claim interest contrary to the provisions of the said Act which was prevailing at the time of the assessment years. In the absence of any statutory provisions and/or any contract to the contrary, the general law of the land is that nobody is entitled to interest as a matter of right and the Assessing Officer under the Income -tax Act cannot be called upon to pay interest in violation of the provisions of the said Act. The court can only direct the Assessing Officer to act in accordance with law and/or to follow the provisions of law and without any specific provisions of law. The court has no power, in my opinion, to direct payment of interest in contravention of the provisions of law.
(2.) ON a perusal of the paragraph quoted (supra) it appears that the learned judge found no enabling provision which could give right to the assessee to claim interest on the refund which was paid as and by way of tax deducted at source. Relevant provision of the statute Sections 214, 240, 243, 244(1A), 244A being relevant herein are quoted below: 214.(1) The Central Government shall pay simple interest at fifteen per cent. per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under sections 207 to 213 exceeds the amount of the assessed tax, from the 1st day of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year during which it is payable by reason of the provisions of Section 213, interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of regular assessment: Provided that in respect of any amount refunded on a provisional assessment under Section 141A, no interest shall be paid for any period after the date of such provisional assessment. (1A) Where as a result of an order under Section 147 or Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 263 or Section 264 or an order of the Settlement Commission under Sub -section (4) of Section 245D, the amount on which interest was payable under Sub -section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee, a notice of demand in the prescribed form specifying the amount of the excess interest payable and requiring him to pay such amount; and such notice of demand shall be deemed to be a notice under Section 156 and the provisions of this Act shall apply accordingly. (2) On any portion of such amount which is refunded under this Chapter, interest shall be payable only up to the date on which the refund was made. (3) This section and sections 215, 216 and 217 shall not apply in respect of any assessment for the assessment year commencing on the 1st day of April, 1989, or any subsequent assessment year and, in the application of the said sections to the assessment for any earlier assessment year, references therein except in Sub -section (1A) and Sub -section (3) of Section 215 to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.' '240. Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the Assessing Officer shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make any claim in that behalf: Provided that where, by the order aforesaid, - (a) an assessment is set aside or cancelled and an order of fresh assessment is directed to be made, the refund, if any, shall become due only on the making of such fresh assessment; (b) the assessment is annulled, the refund shall become due only of the amount, if any of the tax paid in excess of the tax chargeable on the total income returned by the assessee. 243. (1) If the Assessing Officer does not grant the refund, - (a) in any case where the total income of the assessee does not consist solely of income from interest on securities or dividends, within three months from the end of the month in which the total income is determined under this Act, and (b) in any other case, within three months from the end of the month in which the claim for refund is made under this Chapter, the Central Government shall pay the assessee simple interest at fifteen per cent. per annum on the amount directed to be refunded from the date immediately following the expiry of the period of three months aforesaid to the date of the order granting the refund .... (2) Where any question arises as to the period to be excluded for the purposes of calculation of interest under the provisions of this section, such question shall be determined by the Chief Commissioner or Commissioner whose decision shall be final. (3) The provisions of this section shall not apply in respect of any assessment for the assessment year commencing on the 1st day of April, 1989, or any subsequent assessment years. 244.(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 the 31st day of March, 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: Provided that where the amount so found to be in excess was paid in instalments, such interest shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted: Provided further that no interest under this sub -section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding: Provided also that where any interest is payable to an assessee under this sub -section, no interest under Sub -section (1) shall be payable to him in respect of the amount so found to be in excess. 244A.(1) Where refund of any amount becomes due to the assessee under this Act, he shall, subject to the provisions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely: (a) where the refund is out of any tax paid under Section 115WJ or collected at source under Section 206C or paid by way of advance tax or treated as paid under Section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one -half per cent. for every month or part of a month comprised in the period from the 1st day of April of the assessment year to the date on which the refund is granted: Provided that no interest shall be payable if the amount of refund is less than ten per cent. of the tax as determined under Sub -section (1) of Section 115WE or Sub -section (1) of Section 143 or on regular assessment; (b) in any other case, such interest shall be calculated at the rate of one -half per cent. for every month or part of a month comprised in the period or periods from the date or, as the case may be, dates of payment of the tax or penalty to the date on which the refund is granted. Explanation. -. . . (2) If the proceedings resulting in the refund are delayed for reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the Chief Commissioner or Commissioner whose decision thereon shall be final. (3) Where, as a result of an order under Sub -section (3) of Section 115WE or Section 115WF or Section 115WG or Sub -section (3) of Section 143 or Section 144 or Section 147 or Section 154 or Section 155 or Section 250 or Section 254 or Section 260 or Section 262 or Section 263 or Section 264 or an order of the Settlement Commission under subsection (4) of Section 245D, the amount on which interest was payable under Sub -section (1) has been increased or reduced, as the case may be, the interest shall be increased or reduced accordingly, and in a case where the interest is reduced, the Assessing Officer shall serve on the assessee a notice of demand in the prescribed form specifying the amount of the excess interest paid and requiring him to pay such amount; and such notice of demand shall be deemed to be a notice under Section 156 and the provisions of this Act shall apply accordingly. (4) The provisions of this section shall apply in respect of assessments for the assessment year commencing on the 1st day of April, 1989, and subsequent assessment years: Provided that in respect of assessment of fringe benefits, the provisions of this sub -section shall have effect as if for the figures '1989', the figures '2006' had been substituted.
(3.) ON a composite reading of the aforesaid sections it appears to us that the Legislature thought it fit that when the assessee is burdened with payment of interest on a delayed payment of tax there should be a corresponding provision for payment of interest in case any refund is made at a belated stage by the Revenue.;