C.i.t. , Bhopal
v.
Narendra Doshi
(Supreme Court Of India)
Civil Appeal No. 2053 of 2000 | 26-07-2001
The question that the High Court was called upon to answer read thus :
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in upholding the order of the Deputy Commissioner of Income-tax (Appeals), Indore, directing to allow interest on interest, when the law points for grant of simple interest only " *
It answered it in the affirmative and in favour of the assessee, relying upon the judgments which laid down that interest was payable on the excess amount paid towards income-tax.
The Tribunal, whose decision the High Court affirmed, had relied upon the decision of the Gujarat High Court in the case of D.J. Works v. Deputy CIT 1991 GUJ 126, [LQ/GujHC/1990/247] which had been followed by the same High Court in Chimanlal S. Patel v. CIT. These decisions hold that the Revenue is liable to pay interest on the amount of interest which it should have paid to the assessee but has unjustifiably failed to do.
The Revenue has not challenged the correctness of the two decisions of the Gujarat High Court. They must, therefore, be bound by the principle laid down therein. Following that principle, the question has, as we find, been rightly answered in the affirmative and in favour of the assessee.
The civil appeal is dismissed.
No order as to costs.
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in upholding the order of the Deputy Commissioner of Income-tax (Appeals), Indore, directing to allow interest on interest, when the law points for grant of simple interest only " *
It answered it in the affirmative and in favour of the assessee, relying upon the judgments which laid down that interest was payable on the excess amount paid towards income-tax.
The Tribunal, whose decision the High Court affirmed, had relied upon the decision of the Gujarat High Court in the case of D.J. Works v. Deputy CIT 1991 GUJ 126, [LQ/GujHC/1990/247] which had been followed by the same High Court in Chimanlal S. Patel v. CIT. These decisions hold that the Revenue is liable to pay interest on the amount of interest which it should have paid to the assessee but has unjustifiably failed to do.
The Revenue has not challenged the correctness of the two decisions of the Gujarat High Court. They must, therefore, be bound by the principle laid down therein. Following that principle, the question has, as we find, been rightly answered in the affirmative and in favour of the assessee.
The civil appeal is dismissed.
No order as to costs.
Advocates List
R. P. Bhatt, Krishnanand Pandeya, Advocates.
For Petitioner
- Shekhar Naphade
- Mahesh Agrawal
- Tarun Dua
For Respondent
- S. Vani
- B. Sunita Rao
- Sushil Kumar Pathak
Bench List
HON'BLE JUSTICE BRIJESH KUMAR
HON'BLE JUSTICE S. P. BHARUCHA
HON'BLE JUSTICE Y. K. SABHARWAL
Eq Citation
(2004) 2 SCC 801
[2002] 254 ITR 606
LQ/SC/2001/1530
HeadNote
Income Tax Act, 1961 — Ss. 244 and 244A — Interest on interest — Liability of Revenue to pay — Held, Revenue is liable to pay interest on amount of interest which it should have paid to assessee but has unjustifiably failed to do — Revenue not challenging correctness of Gujarat High Court decisions, held, bound by principle laid down therein
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