SINGHAL, J. - (1.) THE Revenue has moved this application under s. 256(2) of the IT Act, 1961 (`the Act') against the order passed by the Tribunal in respect of the asst. yrs. 1972-73, 1975-76 and 1980-81 praying that appropriate directions be given to the Tribunal to refer the following question of law along with statement of the case to this Court:-- "Whether, on the facts and in the circumstances of the case, the ITAT was legally justified in holding that the subsequent orders withdrawing interest on interest are bad in law? Alternatively, can interest under s. 244(1A) of the IT Act, 1961 be granted to an assessee on interest paid by him and subsequently refunded?"
(2.) THE facts of the case are that the assessments for the years 1972-73, 1975-76 and 1980-81 were finalised by the assessing authority and interest under ss. 215, 216 and 220(2) of the Act was charged. THE assessment were framed at a figure much higher than declared by the assessee on the basis of which advance tax was paid and as a result of the assessment, the assessee was required to make the payment of the demand created which was subsequently reduced in appeal. THE assessee claimed refund of the tax amount as well as the interest paid by it under s. 215. THE refund of interest was granted to the assessee in the first instance but the interest on the late payment of tax/interest was not granted. Subsequently an application was moved by the assessee on 9th June 1980 praying that the assessee had deposited the tax as well as the interest under s. 215/216 which is refundable in view of the appellate order and, as such, the refund of interest under s. 244(1A) of the Act should be granted to the assessee. THE IAC vide his order dt. 16th Oct., 1981 allowed interest on the excess payment of both the tax and interest. THEreafter power under s. 154 of the Act was exercised and the interest on interest paid was held not allowable. Against this order passed under s. 154 an appeal was preferred before the CIT (A), which was dismissed. THE Tribunal, however vide its order dt. 6th April, 1987 allowed the appeal and observed that the interest under s. 244(1A) should have been granted to the assessee. After taking into consideration the provisions of s. 244(1A), it was observed that, it is a matter of common knowledge that ultimately what is recovered is the amount of tax and interest and if the tax is ultimately found not to be payable, the Revenue would be charging interest on an amount which was never due to it. Under sub-s. (2) of s. 220 if the amount specified in a notice of demand is not paid within the period prescribed under sub-s. (1), the assessee is liable to pay simple interest and, therefore, the amount of demand notice would include interest also. THE Tribunal further came to the conclusion that the language of s. 244(1A) in the opening words does not specifically refer to tax only. THE interest which is withdrawn as it is a highly debatable point. Initially the interest on interest was allowed by the ITO under s. 154 itself and, therefore, there could not have been a second order under s. 154 withdrawing the said interest over interest. THE order could have been revised under s. 263 of the Act by the CIT. It may also be noted that in this case, the order of the ITO allowing the interest on interest was subject-matter of appeal which was subsequently withdrawn by the ITO by his order under s. 154 cannot be withdrawn as the said order was rectified and the IAC allowed the assessee's claim. THE appeals before the CIT (A) were dismissed on the ground that they had become infructuous and as such, the subsequent order withdrawing the interest on interest was held bad in law. From the order of the Tribunal, it is evident that the Tribunal has allowed to appeal of the assessee on merit on the basis that the language of s. 244(1A) in the opening words does not specifically refer to tax only and, therefore, the interest is payable on interest amount collected by the Revenue. The appeal of the assessee was also allowed on the ground that it is a highly debatable point and the order passed under s. 154 withdrawing the interest over the interest is not permissible under s. 154. So far as the first point is concerned, we would have directed the Tribunal to refer the question of law as framed under s. 256(1) as it involved the interpretation of the provisions of s. 244(1A) but, even if such a direction is given, the Revenue will not gain anything as the second point which has been decided in favour of the assessee is that it is a highly debatable point as to whether under s. 154, the interest over the interest could be withdrawn or not. In Chimanlal S. Patel vs. CIT (1994)210 ITR 419, Gujarat High Court has held that interest on interest can also be claimed. No question was raised by the Revenue so far as the second ground of relief is concerned and no useful purpose would be served in giving direction to the Tribunal to refer only one question of law as prayed by the Revenue. The failure of the Revenue to frame any question of law in the proceedings under s. 256(1) curtails the jurisdiction of this Court under s. 256(2) to consider that aspect of the matter. The proper course for the Revenue was to raise the second question as to whether the interest on interest could have been withdrawn in the proceedings under s. 154 and whether it is a debatable issue or not. No such question has been raised and, as such, in the absence of raising such question, the prayer which has now been made under s. 256(2) cannot be allowed. Raising of one question of law alone has made it academic and the petition is liable to be dismissed on that ground alone.;