COMMISSIONER OF INCOME TAX Vs. G B TRANSPORTS

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, Cochin Bench had under S.256(2) of the Income Tax Act 1961, referred for the opinion of this Court, at the instance of the Revenue, the following common questions of law arising out of a common order of the Tribunal in I. T. A. Nos. 338 to 342 (Coch) 74-75 dated 10-3-1976 for each of the assessment years 1967-68 to 1971-72:

(2.) The answer to the first question depends upon the construction of the much debated phrase "regular assessment" occurring in S.214(1) of the Act. The identical question arose for decision before a Division Bench of this Court in N. Devaki Amma v. I. T. O., 1980 (122) ITR 272 (Ker.). Bhaskaran J , as he then was, held:

(3.) The short facts leading to the reference are: The assessee, a registered firm, had paid advance tax during the financial years previous to each of the assessment years 1967-68 to 1971-72. The Income Tax Officer on completing the assessment granted interest under S.214 on the amount which was refunded. Subsequently as a result of the orders in appeal, there was reduction in the amount of tax payable for each of the assessment years. Consequently the assessee became entitled to further refund. The Income Tax Officer in passing the consequential orders did not advert to the point of enhancement of interest under S.214. The assessee applied for rectification of the orders under S.154. The application was rejected. The I.T.O. was of the view that the calculation of the interest under S.214 cannot be revised on the basis of the reduced income determined in appeals. The Appellate Assistant Commissioner on appeal directed the I.T.O. to pass rectification orders under S.154 allowing interest under S.214 on the further refund allowed. The appeals filed by the Revenue before the Appellate Tribunal were dismissed. The Tribunal drawing support from the decision of the Calcutta High Court in the case of Kooka Sidhwa and Co. v. CIT (1964) 54 ITR 54 (Cal) rejected the contention of the Revenue and stated: