Dwarka Prasad Gupta, J. - (1.) THESE four writ petitions arise in similar circumstances and as such they are disposed of by a common order.
(2.) THE petitioner, in all these four writ petitions, is a public limited company known as the Maharaja Shree Umaid Mills Ltd., Pali (hereinafter called " the company "), and the questions which have been raised in these writ petitions relate to the validity of the notices for rectification issued under Section 35 of the Indian I.T. Act, 1922 (hereinafter referred to as the old Act). THEse four writ petition relate to the assessment years 1953-54, 1954-55, 1956-57 and 1957-58. THE undisputed facts are that returns were filed by the petitioner-company in respect of the aforesaid assessment years on various dates under the old Act and the assessment orders in respect thereof were also passed by the ITO on various dates before the I.T. Act, 1961 (hereinafter referred to as " the new Act, ") came into force. THE last assessment order, relating to the assessment year 1957-58, was passed on March 24, 1962. Thus, the assessment proceedings in respect of all the four assessment years were completed before the new Act came into force with effect from April 1, 1962. Appeals were preferred by the company in respect of the assessment orders relating to each one of the aforesaid assessment years before the AAC. Against the orders passed by the AAC, further appeals were filed before the Tribunal in respect of all the four assessment orders. THE Tribunal decided all the four appeals, relating to the four assessment years referred to above, by its order dated March 31, 1969. As the company was found to be entitled to a refund consequent upon the order passed by the Tribunal dated March 31, 1969, in respect of each of the four assessment years, the ITO passed consequential orders of refund. The ITO also allowed interest to the company on the amount of refund, in accordance with the provisions of Section 244 of the new Act, by different orders passed during the year 1971. After the amount allowed by way of refund along with interest thereon was paid to the company, the ITO issued notices for rectification under Section 35, of the old Act. Two grounds were mentioned in the notices on account of which, in the opinion of the ITO, there was a mistake apparent on the face of the record of the orders for refund and they required to be rectified. The first ground was that as the assessments for the years in question were completed in accordance with the provisions of the old Act, Section 297(2)(i) of the new Act was not applicable. The other ground which was referred to in the notices for rectification was that as the appeals against the assessment orders were decided under the old Act, Section 240 of the new Act could not apply, and, as such, interest could not have been allowed to the assessee under Section 244 of the new Act. The petitioner-company has challenged the notices for rectification, issued by the ITO in respect of the orders for refund passed by him relating to the aforesaid four assessment years and it has been urged by the learned counsel for the petitioner-company that although the assessment proceedings were completed before the new Act come into force on April 1, 1962, yet the appeals were decided after the aforesaid date under Section 297(2)(e) of the new Act, and the provisions of Section 297(2)(i) were attracted and interest was rightly paid to the assessee under Section 244 of the new Act. Learned counsel for the company submitted that as the assessment proceedings were completed in respect of each one of the four assessment years before the coming into force of the new Act and as a refund in respect of the four assessment years in question fell due after the commencement of the new Act, the provisions of Section 297(2)(i) of the new Act were squarely applicable and interest was payable by the Central Govt. on the amount of refund, in accordance with the provisions of Section 244 of the new Act. On the other hand, learned counsel for the Revenue argued that as the appeals were heard and disposed of in accordance with the provisions of the old Act, as if the new Act had not been passed, as provided in Section 297(2)(c) of the new Act, the disposal of the appeals was relatable to the respective dates on which the assessment proceedings were completed by the ITO concerned and as the assessments for all the four years were admittedly completed before the commencement of the new Act, refund was also payable to the petitioner-company under the provisions of the old act and as such no interest was payable on the amount of refund. It would be useful at this stage to extract the relevant provisions of Section 297(2)(i) of the new Act, which required to be interpreted in the present case : " 297(2)(i). Where, in respect of any assessment completed before the commencement of this Act, a refund falls due after such commencement or default is made after such commencement in the payment of any sum due under such competed assessment, the provisions of this Act relating to interest payable by the Central Government on refunds and interest payable by the assessee for default shall apply." The question, as to whether interest was payable under the new Act in such circumstances, where the assessee became entitled to a refund consequent to the orders passed on appeal or in other proceedings after the new Act came into force, came up for consideration before the Madras High Court in Pandyan Insurance Co. Ltd. v. CIt [1969] 73 ItR 12. In that case, the assessment was completed before the commencement of the new Act and ultimately the matter went to the Supreme Court and consequent upon the decision of the Supreme Court, after the coming into force of the new Act, the assessee became entitled to a refund and the consequential order of refund was also passed, naturally, after the coming into force of the new Act. The assessee, in that case, claimed interest under Sub-section (7) of Section 66 of the old Act, from the date when the order entitling the assessee for refund was passed up to the date when the amount was actually paid to the assessee. The learned judges of the Madras High Court held in the aforesaid case that the pre-requisites for the application of Section 297(2)(i) of the new Act were satisfied and, as such, the provisions of the new Act relating to payment of interest by the Central Government on refund shall apply. Their Lordships of the Madras High Court observed as under in the aforesaid case (p. 13): " In view of this provision, the intention of which appears to be that the interest on refund in respect of the assessment completed before the commencement of the new Act and on refund which fell due after its commencement, should entirely be governed by the provisions of the new Act, the words ' other proceedings under this Act' in Section 240 and the following sections should be understood accordingly. That is because this group of sections is designed to apply under the scheme of the Act to appeals or proceedings under the provisions of the new Act, but where the matter relates to an assessment completed before the commencement of the new Act, and the refund became due after the commencement of the Act, those provisions are qualified by Section 297(2)(i), so as to make them apply to such a situation. On that view, since the refund indisputably had been made within six months of the order which directed it, there is no liability on the part of the department to pay interest".
(3.) IN C. G. Krishnaswami Naidu v. CIT [1975] 100 ITR 33, the Madras High Court again reiterated its earlier view taken in Pandyan INsurance Co.'s case [1969] 73 ITR 12 (Mad). It was urged before the Madras High Court in that case that the assessment proceedings can be said to be completed only when the assessment became final, after the pronouncement of the order of the highest authority in the hierarchy of authorities constituted under the Act, and thus the assessment could be held to have been completed only when the High Court passed its ultimate order, on a reference made to it under Section 66 of the old Act, and thus one of the pre-requisites for the application of Section 297(2)(i) was lacking. This contention, which is identical to the one advanced before me by the learned counsel for the Revenue, was rejected by their Lordships of the Madras High Court and it was observed that finality of an assessment has nothing to do with the factual conclusion of an assessment, and although the assessment was completed before the new Act came into force, yet it may not have acquired finality on account of appeal or other proceedings and so one should not confuse between the finality of an assessment and the completion of an assessment. The same view was taken 'by the Allahabad High Court in Hira Lal Jagarnath Prasad v. CTT [1969] 74 ITR 732, where the assessment was completed before the commencement of the new Act, but the assessee became entitled to a refund by virtue of the answer given by the High Court on a reference and the consequential order passed by the Appellate Tribunal under Section 66(5) of the old Act. It was observed by the learned judges of the Allahabad High Court that so far as the refund was concerned, Section 297(2)(i) was a self-contained provision, which made the provisions of the new Act applicable to the question of refund in such a situation, where the assessment was completed before the commencement of the new Act but the entitlement for refund accrued to the assessee after the new Act came into force. In Raja Jagadambika Pratap Narain Singh v. ITO [1970] 76 ITR 619 (All), the facts were that the assessment was completed before the commencement of the new Act, but the assessee became entitled to a refund as a result of the decision of the High Court on a reference. The Allahabad High Court expressed some doubt as to whether the assessment could be said to have been completed while proceedings in respect thereof were pending, but no final decision was given on the question as the writ petition was disposed of on a different ground. ;