COMMISSIONER OF INCOME TAX, DELHI-II V. M/S. JYOTSNA HOLDINGS (P) LTD.

28962-2005

AI Insights

The case revolves around the entitlement of interest on a refundable tax amount that was adjusted by the Income Tax Department against a demand for a previous assessment year. The respondent, M/s. Jyotsna Holdings (P) Ltd., had filed a self-assessed tax return for the Assessment Year 1987-88, paying a substantial amount. Following the assessment, a refund was determined for the same year, which was not immediately returned to the assessee but was instead adjusted against a tax demand for the year 1986-87. The core legal issue was whether the assessee was entitled to interest on the refundable amount during the period it was withheld by the Department. The Income Tax Appellate Tribunal and the High Court had both ruled in favor of the assessee, a decision which the Supreme Court upheld.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 575654 (SC)
• Appeal Type: Supreme court cases
• Pronouncement Date: 08-03-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: SUPREME COURT
• Department Lawyers: AJAY VORA; KAVITA JHA; BHARGAVA DESAI; SAUMYA MEHROTRA; PRAKASH KUMAR; BHAVITA
• Assessee Lawyers: LIZ METHEW; ASHOK PANIGRIA; B V BALARAM DAS
• Keywords: Assessment Year; Income Tax; Interest; Refund; Self Tax Assessment
• Section: 143(3); 244(1A)

Judgement Text

"1 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S). 1774/2006 COMMISSIONER OF INCOME TAX, DELHI-II Appellant(s) VERSUS M/S. JYOTSNA HOLDINGS (P) LTD. Respondent(s) O R D E R For the sake of convenience, we take note of the facts in respect of Assessment Year 1987-88 as similar factual situation appears in respect of all three Assessment Years viz. 1985-86, 1986-87 and 1987-88. For the Assessment Year 1987-88, the respondent herein filed its return on the basis of self tax assessment made by the it and paid a sum of Rs.3,23,68,834/- on 12.09.1987. The assessment was made under Section 143(3)by the Assessing Authority as per which an amount of Rs. 2,03,29,841/- was found refundable to the respondent/assessee. Instead of immediate refund of this amount, the Assessing Authority ordered that the same would be adjusted against the demand for the year 1986-87. It was ultimately adjusted on 25.07.1991. The question that arose, in these circumstances, was as to whether the assessee would be entitled to interest on the aforesaid amount which was kept by the Revenue for the period from 28.03.1988 to 25.07.1991. The assessee claimed the interest, which request was rejected by the Assessing Officer. However, the Commissioner of Income Tax (Appeals) allowed Digitally signed by ASHWANI KUMAR Date: 2016.03.12 11:45:15 IST Reason: Signature Not Verified 2 the appeal of the assessee against the order of the Assessing Officer by invoking the provisions of Section 244(1A) of the Income Tax Act and held that the interest is payable on the aforesaid amount. This order is upheld by the Income Tax Appellate Tribunal as well as by the High Court. We have gone through the impugned order and we do not find anything wrong with the impugned order. The amount in question, though found refundable to the assessee, was utilized by the Department and, therefore, interest was payable under Section 244(1A) of the Income Tax Act. This appeal is, thus, without any merit and is, accordingly, dismissed. ......................J. [A.K. SIKRI] ......................J. [ROHINTON FALI NARIMAN] NEW DELHI; MARCH 08, 2016 3 ITEM NO.313 COURT NO.12 SECTION IIIA S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No(s). 1774/2006 COMMISSIONER OF INCOME TAX, DELHI-II Appellant(s) VERSUS M/S. JYOTSNA HOLDINGS (P) LTD. Respondent(s) Date : 08/03/2016 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Appellant(s) Ms. Liz Methew, Adv. Mr. Ashok Kr. Panigria, Adv. Mr. B. V. Balaram Das,Adv. For Respondent(s) Mr. Ajay Vora, Sr. Adv. Ms. Kavita Jha, Adv. Mr. Bhargava V. Desai,Adv. Ms. Saumya Mehrotra, Adv. Mr. Prakash Kumar, Adv. Ms. Bhavita, Adv. UPON hearing the counsel the Court made the following O R D E R The Civil Appeal is dismissed in terms of the signed order. Interlocutory Application(s) pending, if any, shall stand disposed of accordingly. (Ashwani Thakur) (Tapan Kr. Chakraborty) COURT MASTER COURT MASTER (Signed order is placed on the file) "