1. The facts in the reference can be briefly narrated. The assessee had paid the advance tax of Rs. 1,00,431-7-0 for the assessment year 1952-53, and on October 10,1952, the assessment under Section 23(3) of the Indian Income Tax Act was finalised. The Income Tax Officer then allowed Rs. 1,879-1-0 as interest on the advance tax; but on May, 24, 1953, the aforesaid provision relating to interest was amended; and, according to the amendment, the assessee would only be entitled to interest till the last date of the year of assessment, which in this case, would March 31, 1952; and not till the date of assessment as the Income Tax Officer had done. It is common ground that this amendment to Section 18A of the Income Tax Act had been given retrospective operation, and was deemed to have come in effect on April 1, 1952. Consequently the Income Tax Officer issued notice under Section 34 of the Act and found the assessee to be entitled to only Rs. 839-11-0 as interest instead of Rs. 1,879-1-0, which had been all allowed earlier. The assessee was therefore asked to re-pay Rs. 1,039-6-0 and an additional demand for that sum was made under Section 34. The assessee objected, and finally the Appellate Tribunal has allowed the appeal, holding that Section 34 of the Act cannot be relied for the purpose. Thereafter, a petition under Section 66(1) of the Income Tax Act was made, and the following question of law has been referred to this Court:

"Whether on the facts and in the circumstances of the case the provisions of Section 34(1)(b) of the Income Tax Act were applicable and the re-assessment under Section 34 in order".

2. There are decisions covering the question; for the Bombay High Court has in Simplex Mills Ltd. v Subramanyam, Income Tax Officer ( (1958) 34 ITR. 711) [LQ/BomHC/1958/182] held that the payment of interest by the Central Government under Section 18A(5) on tax paid in advance, was neither a relief under the Act, nor attributable to income, profits or gains chargeable to income tax, and though the excess payment of interest could be recovered under Section 35, it could not be recovered under Section 34. That decision has been followed by a Division Bench of this Court in Commissioner of Income Tax v Noonshi Devshi Kathawala (Private) Ltd., Cochin (ITR 22/59, Since reported in 1960 KLJ 1154 [LQ/KerHC/1960/375] ) decided on August 24, 1960. It follows that the rule is well settled that Section 34 could not be relied upon to support proceedings to recover excess interest allowed in the original assessment under Section 18A(5). It further follows that the answer to 34(1)(b) of the Act were not applicable to the facts and circumstances of the case.

3. Therefore, let the aforesaid answer be sent to the department and the assessee will be entitled to the costs of this reference, the Counsel fee we fix at Rs. 100/-.