Mitsui Engineering & Ship.C V. The Asst. Director of Income Tax, International Taxation, New Delhi

W.P.(C)/6708/2005

AI Insights

The case involves M/S Mitsui Engineering & Ship.C, the petitioner, challenging the order of the Director of Income Tax, International Taxation, New Delhi, which dismissed their application for additional interest under Section 244(1A) of the Income Tax Act, 1961. The dismissal was based on a judgment by the Bombay High Court in the case of Sandvik Asia Ltd v. Commissioner of Income Tax-1, which was later overturned by the Supreme Court. The petitioner argued that the reasoning in the impugned order was no longer valid following the Supreme Court's decision. The High Court of Delhi, upon reviewing the submissions and the relevant legal precedents, decided in favor of the petitioner, leading to the quashing of the earlier order and directing a re-evaluation of the interest calculation.

• Counselvise Citation: [] 140 COUNSELVISE.COM (IT) 842452 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 23-02-2026
• Assessment Year: misc
• Other Referred Cases: Sandvik Asia Ltd v. Commissioner of Income Tax-1
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SIDDHARTHA SINHA; EASHA GURUNG
• Assessee Lawyers: RAJIV TYAGI
• Keywords: Additional interest; Income Tax; International Taxation; Writ petition; Director of Income Tax
• Section: 154; 244(1A)

Judgement Text

" W.P.(C) 6708/2005 Page 1 of 3 $~64 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 23rd February, 2026 + W.P.(C) 6708/2005 M/S MITSUI ENGINEEGIN & SHIP.C .....Petitioner Through: Mr. Rajiv Tyagi, Adv. versus THE ASST. DIRECTOR OF INCOME T .....Respondent Through: Mr. Siddhartha Sinha, SSC with Ms. Easha Gurung, JSC. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR J U D G M E N T DINESH MEHTA, J. (ORAL) 1. By way of the instant writ petition, the petitioner has challenged the order of the Director of Income Tax, International Taxation, New Delhi dated 20.01.2005 whereby petitioner’s application under Section 154 of the Income Tax Act for additional interest under Section 244(1A) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’) has been dismissed. 2. Learned counsel for the petitioner submitted that the reasoning of impugned order rejecting the petitioner’s application for interest was based upon the judgment of Bombay High Court rendered in the case of Sandvik Asia Ltd v. Commissioner of Income Tax-1 reported in (2004) 267 ITR 78 Printed from counselvise.com Digitally Signed By:NAVEEN KUMAR Signing Date:27.02.2026 11:14:38 Signature Not Verified W.P.(C) 6708/2005 Page 2 of 3 (Bom), which judgment and the same has been reversed by Hon’ble the Supreme Court vide the judgment dated 27.01.2006 reported in [2006] 280 ITR 643 (SC). 3. Having heard learned counsel for the parties and considering the fact that the judgment passed by the Bombay High Court in the case of Sandvik Asia (supra) has been upturned, we are persuaded to allow the present writ petition. 4. The present writ petition is allowed in light of the judgment of Hon’ble the Supreme Court rendered in Sandvik Asia Ltd v. Commissioner of Income Tax-1. The order dated 20.01.2005 passed by the Director of Income Tax, International Taxation, New Delhi impugned in the present writ petition is hereby quashed. 5. The competent authority, which we are informed is the Commissioner of Income Tax, is directed to pass a fresh order within a period of 3 months from the date of placing a certified/web copy of the instant order. 6. While calculating the amount of interest, the competent authority or the Assessing Officer as the case may be, shall take into account the extant provisions of law, including the rate of interest as applicable from time to time. 7. Considering that the case relates to the Assessment Year 1988-89, we hereby order that in case the needful is not done within 3 months of placing the certified/web copy of the order instant, the same shall carry interest at the rate of 1% per annum from 01.06.2026 until the extra amount is paid, apart from the interest as payable under Section 244 or 244(A) or 244(1A) of the Act of 1961. 8. The petition stands allowed. Printed from counselvise.com Digitally Signed By:NAVEEN KUMAR Signing Date:27.02.2026 11:14:38 Signature Not Verified W.P.(C) 6708/2005 Page 3 of 3 9. The petitioner shall be free to give its calculation of interest, while placing a certified copy of the instant order. DINESH MEHTA (JUDGE) VINOD KUMAR (JUDGE) FEBRUARY 23, 2026/sr Printed from counselvise.com Digitally Signed By:NAVEEN KUMAR Signing Date:27.02.2026 11:14:38 Signature Not Verified "