DCIT, Spl. Range,, v. Simbaoli Sugar Mills Ltd.,,

ITA 4059/DEL/2001 | 1988-1989
Pronouncement Date: 09-04-2010 | Result: Dismissed

Appeal Details

RSA Number 405920114 RSA 2001
Bench Delhi
Appeal Number ITA 4059/DEL/2001
Duration Of Justice 8 year(s) 4 month(s) 17 day(s)
Appellant DCIT, Spl. Range,,
Respondent Simbaoli Sugar Mills Ltd.,,
Appeal Type Income Tax Appeal
Pronouncement Date 09-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 09-04-2010
Date Of Final Hearing 08-04-2010
Next Hearing Date 08-04-2010
Assessment Year 1988-1989
Appeal Filed On 22-11-2001
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NOS. 4058 & 4059/DEL/2001 ASSESSMENT YEARS: 1986-87 & 1988-89 DCIT SPECIAL RANGE GHAZIABAD. VS. M/S SIMBHAOLI SUGAR MILLS LTD. SIMBHAOLI GHAZIABAD. PAN NO. - (APPELLANT) (RESPONDENT) APPELLANT BY : SH.G.S. SAHOTA SR. DR RESPONDENT BY: SH. M.M. KWATRA CA O R D E R PER BENCH : BOTH THESE APPEALS ARE FILED BY THE REVENUE AND TH EY ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS OF CIT(A) DATED 10 TH SEPTEMBER 2001 IN RESPECT OF ASSESSMENT YEARS 1986-87 & 1988-89. THE GROUNDS OF APPEAL FOR BOTH THE YEARS ARE IDENTICAL AND THEY RE AD AS UNDER: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW THE INTEREST U/S 214(1A) & 244(1A). 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE EXPLANATION 1 OF SECTION 214 OF I.T. ACT 1961 WHE REIN THE TAX ON WHICH INTEREST U/S 214 IS ALLOWABLE HAS BEEN DEFINE D. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN IGNORING THE BOARDS INSTRUCTION ISSUED UNDER F.NO. 12/12/68-IT( A-II) DATED 11.12.1968 WHEREIN THE AMOUNT ON WHICH INTEREST U/S 214 IS ALLOWABLE HAS BEEN CLARIFIED. 4. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW INTEREST U/S 244(1A) ON THE AMOUNT OF PREPAID TAXES IGNORING THE 2 ITA NOS. 4058 & 4059/DEL/2001 FACTS THAT INTEREST U/S 244(1A) IS PAYABLE ONLY ON REFUND OF AMOUNT PAID IN PURSUANCE TO ANY ORDER OF ASSESSMENT OR PEN ALTY. 5. THE ORDER OF LD. CIT(A) IS ERRONEOUS ON FACTS AS WELL AS ON LAW THEREFORE THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF AO BE RESTORED ON THIS ISSUE. 2. THE FACTS RELATING TO EACH YEAR INVOLVED ARE AS UNDER: - ASSESSMENT YEAR 1986-87 THE ASSESSEE PAID TOTAL TAX OF RS. 1 15 12 000/-. IT IS ALSO PAID SELF-ASSESSMENT TAX U/S 140A OF RS. 29 00 000/ - BEFORE FILING THE RETURN. THUS THE TOTAL TAX PAYMENT AS PER RETURN OF INCOME WAS RS. 1 44 12 000/-. THE ASSESSEE FILED I TS RETURN OF INCOME SHOWING TOTAL INCOME OF RS. 1 18 76 950/- WHICH WAS ASSESSED U/S 143(3) DATED 29.3.1989 AT A FIGURE OF RS. 2 64 76 290/-. THIS ASSESSMENT WAS REVISED U/S 154 ON 27.11.89 ON TOTAL INCOME OF RS. 2 63 11 140/-. THE TAX DEMANDED ON REVISED ASSESSMENT U/S 154 WAS PAID BY THE ASSESSEE ON 27.11.89. SUBSEQUENT TO THE ORDER OF T HE CIT(APPEALS) THE INCOME WAS ASSESSED AT RS. 1 59 15 320/- AND THE TAX WAS ASSESSED U/S 251 AT RS. 88 30 876/- AND THE ASSESSEE WAS GRANTED REFUND OF RS. 62 98 609/-. AL ONG WITH THIS REFUND THE INTEREST U/S 244(1A) OF RS. 1 10 8 14/- WAS ALLOWED TO THE ASSESSEE. THE ASSESSEE MOVED AN APPLICATION U/S 154 DATED 1.18.1990 STATING THE WHILE DETERMINING REFUND NO INTEREST U/S 214 HAS BEEN ALLOWED TO IT WHICH IS A MISTAKE ON THE FACE OF RECORD AND IS RECTIFIABLE U/S 154. THE AO REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT NO INTEREST IS ALLOWABLE U/S 214 AS A R ESULT OF THE APPELLATE ORDER. THE AO RELIED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF LALA LAXMIPAT SINGHANIA VS. CIT (110 ITR 289). ASSESSMENT YEAR 1988-89 3 ITA NOS. 4058 & 4059/DEL/2001 THE ASSESSEE IN THIS CASE WAS COMPLETED U/S 143(3) DATED 30.10.1990 ON TOTAL INCOME OF RS. 1 82 30 060/- AND AFTER GIVING CREDIT TO PREPAID TAXES NET DEMAND PAYABLE WORKED OUT AT RS. 4 33 013/-. AGAINST THIS ORDER ASSESSE E WENT IN APPEAL BEFORE CIT(A) BASED ON WHICH A REFUND OF RS. 53 72 39/- WAS WORKED OUT AND ISSUED TO THE ASSESSE E. THE ASSESSEE MOVED AN APPLICATION U/S 154 STATING THAT THE INTEREST U/S 214(1A) AND 244(1A) HAS NOT BEEN ALLOW ED. AS IN THE A.Y. 1985-86 THE AO REJECTED THE CLAIM OF T HE ASSESSEE RELYING ON THE DECISION OF HONBLE ALLAHAB AD HIGH COURT IN THE CASE OF LALA LAXMIPAT SINGHANIA VS. CI T (110 ITR 289). 3. LD. CIT(A) HAS GRANTED THE RELIEF TO THE ASSESSE E FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MO DI INDUSTRIES LTD. VS. CIT 216 ITR 759 (SC). LD. CIT(A) HAS HELD THAT THE ASSESSEE IS ENTITLED TO RECEIVE INTEREST U/S 214(1A) ON THE DIF FERENCE OF THE ADVANCE TAX AND THE TAX ASSESSED U/S 251 FROM THE FIRST DAY OF THE ASSESSMENT YEAR TILL THE DAY OF PASSING THE REGULAR ASSESSMENT U/S 143(3). IN RESPECT OF INTEREST U/S 244(1A) LD. CIT(A) HAS HELD THAT TH E SAME SHOULD BE ALLOWED TO THE ASSESSEE FIRSTLY FROM THE DATE OF RE GULAR ASSESSMENT TILL THE DATE OF GRANT OF REFUND ON THE AMOUNT OF PREPAI D TAX FOUND IN EXCESS OF THE TAX ASSESSED U/S 251 AND FURTHER INTEREST FR OM THE DATE OF PAYMENT OF REGULAR TAX RS. 11 30 671/- TILL THE DATE OF GRA NT OF RETURN IN RESPECT OF ASSESSMENT YEAR 1986-87 AND SIMILAR DIRECTIONS WERE GIVEN FOR A.Y. 1988-89. THE DEPARTMENT IS AGGRIEVED BY SUCH DIREC TIONS GIVEN BY LD. CIT(A) TO THE AO AND HENCE HAS FILED THE ABOVE GROU ND OF APPEAL. 4 ITA NOS. 4058 & 4059/DEL/2001 4. LD. DR AFTER NARRATING THE FACTS RELYING ON THE ORDER OF AO AND GROUNDS OF APPEAL PLEADED THAT LD. CIT(A) WAS WRON G IN DIRECTING THE AO TO GRANT INTEREST TO THE ASSESSEE FOR BOTH THE ABOV E MENTIONED ASSESSMENT YEARS UNDER THE PROVISIONS OF SEC. 214 A ND 244(1A). 5. ON THE OTHER HAND IT WAS SUBMITTED BY LD. AR TH AT THE CASE LAW RELIED UPON BY LD. AO CANNOT BE APPLIED TO THE YEAR S UNDER CONSIDERATION AS THERE WAS A CHANGE IN THE PROVISIONS WHEN SEC. 2 14(1A) WAS ENACTED BY THE TAXATION LAW AMENDMENT ACT 1984 W.E.F. 1985 -86. HE SUBMITTED THAT HONBLE ALLAHABAD HIGH COURT IN THE CASE OF LA LA LUXMIPAT SINGHANIA VS. CIT (SUPRA) HAD HELD THAT LIABILITY T O PAY INTEREST ON THE EXCESS AMOUNT OF ADVANCE TAX DEPOSITED WOULD ARISE ONLY UPTO THE DATE OF FIRST OR ORIGINAL ASSESSMENT AND NOT THE DATE OF A FRESH ASSESSMENT OR MODIFICATION OF THE ASSESSMENT TO GIVE EFFECT TO TH E DECISION OF APPELLATE OR REVISIONAL AUTHORITY. HE CONTENDED THAT THE SAI D POSITION OF LAW AS EXPLAINED BY HONBLE ALLAHABAD HIGH COURT HAD UNDER WENT A CHANGE BY THE AFOREMENTIONED AMENDMENT WHERE EXISTING PROVISI ONS OF 214(1A) WAS SUBSTITUTED BY A NEW SUB SECTION (1A) TO PROVID E THAT WHERE AS A RESULT OF ANY ORDER UNDER THE SECTIONS SPECIFIED TH EREIN THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB-SECTION 1 OF S EC. 214 HAS BEEN INCREASED OR REDUCED THE INTEREST PAYABLE BY THE G OVERNMENT SHALL BE INCREASED OR REDUCED ACCORDINGLY. THEREFORE IT WA S PLEADED BY LD. AR THAT ONCE THE AMOUNT ON WHICH THE INTEREST WAS PAYA BLE CHANGED IT IS NECESSARY FOR THE REVENUE TO RECOMPUTED THE INTERES T IN ACCORDANCE WITH THE REVISED AMOUNT. 5 ITA NOS. 4058 & 4059/DEL/2001 6. LD. AR REFERRED TO THE DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF MODI INDUSTRIES LTD. VS. CIT 216 ITR 759 W HEREIN THEIR LORDSHIPS HAVE CONSIDERED SEC. 214 AND SEC. 244(1A) AND HAVE LAID DOWN FOLLOWING PROPOSITIONS OF LAW: - (I) UP TO MARCH 31 1975 INTEREST U/S 214 IS PAY ABLE FROM THE FIRST DAY OF APRIL OF THE RELEVANT ASSESSMENT Y EAR TO THE DATE OF THE FIRST ASSESSMENT ORDER. THE AMOUNT ON WHICH THE INTEREST IS TO BE PAID IS THE AMOUNT OF ADVANCE TAX PAID IN EXCESS OF THE TAX PAYABLE BY THE ASSESSEE AS CALCUL ATED IN THE REGULAR ASSESSMENT (THE FIRST ASSESSMENT ORDER) . THE AMOUNT ON WHICH INTEREST WAS PAYABLE DID NOT VARY D UE TO THE REDUCTION OR ENHANCEMENT OF TAX AS A RESULT OF ANY SUBSEQUENT PROCEEDING. BUT WITH EFFECT FROM APRIL 1 1985 WHILE THE PERIOD FOR WHICH INTEREST WAS PAYABLE REM AINED CONSTANT THE AMOUNT ON WHICH THE INTEREST WAS PAYA BLE VARIED WITH THE VARIATION IN THE QUANTUM OF REFUND AS A RESULT OF ANY SUBSEQUENT ORDERS. (II) IF ANY TAX IS PAID PURSUANT TO AN ASSESSMENT ORDER AFTER MARCH 31 1975 (WHICH WILL INCLUDE TAX DEDUCTED AT SOURCE AND ADVANCE TAX TO THE EXTENT THE SAME HAS BEEN RET AINED AND TREATED BY THE INCOME TAX OFFICER AS PAYMENT OF TAX IN DISCHARGE OF THE ASSESSEES TAX LIABILITY IN THE AS SESSMENT ORDER) BECOMES REFUNDABLE WHOLLY OR IN PART AS A R ESULT OF ANY APPELLATE OR OTHER ORDER PASSED THE CENTRAL GOVERNMENT WILL HAVE TO PAY THE ASSESSEE INTEREST O N THE REFUNDABLE AMOUNT U/S 244(1A). FOR THE PURPOSE OF THIS SECTION THE AMOUNT OF ADVANCE PAYMENT OF TAX AND T HE AMOUNT OF TAX DEDUCTED AT SOURCE MUST BE TREATED AS PAYMENT OF INCOME TAX PURSUANT TO AN ORDER OF ASSES SMENT ON AND FROM THE DATE WHEN THESE AMOUNTS WERE SET OF F 6 ITA NOS. 4058 & 4059/DEL/2001 AGAINST THE TAX DEMAND RAISED IN THE ASSESSMENT ORD ER IN OTHER WORDS THE DATE OF THE ASSESSMENT ORDER. (III) WITH EFFECT FROM APRIL 1 1985 INTEREST PAY ABLE U/S 214 WILL INCREASE OR DECREASE IN ACCORDANCE WITH THE VA RIATION IN THE QUANTUM OF THE EXCESS PAYMENT OF TAX BROUGHT AB OUT BY ORDERS PASSED SUBSEQUENT TO THE REGULAR ASSESSMENT AS MENTIONED IN SUB-SECTION (1A). 7. HE CONTENDED THAT LD. CIT(A) WHILE REFERRING TO THE ABOVE MENTIONED POSITION OF LAW AS DECLARED BY APEX COURT HAS ALSO REFERRED TO THE FOLLOWING OBSERVATIONS OF THEIR LORDSHIPS OF HO NBLE SUPREME COURT FROM THE SAID DECISION RELYING ON WHICH HE HAS GIVE N THE NECESSARY RELIEF TO THE ASSESSEE: - ONCE THE AMOUNT OF ADVANCE TAX IS TREATED AS PAYME NT OF TAX IN RESPECT OF INCOME OF THE RELEVANT PREVIOUS Y EAR AND CREDIT AS SUCH FOR THE AMOUNT HAS BEEN GIVEN TO THE ASSESSEE IN THE ASSESSMENT ORDER THE AMOUNT LOSES ITS CHARACTER OF ADVANCE TAX AND BECOMES INCOME TAX PAI D IN RESPECT OF THE INCOME OF THE RELEVANT PREVIOUS YEAR . IT IS ALSO HELD THAT ONCE THE AMOUNT OF ADVANCE TA X IS TREATED AS PAYMENT OF TAX IN RESPECT OF INCOME OF T HE RELEVANT PREVIOUS YEAR AND CREDIT AS SUCH FOR THE A MOUNT HAS BEEN GIVEN TO THE ASSESSEE IN THE ASSESSMENT ORDER THE AMOUNT LOSES ITS CHARACTER OF ADVANCE TAX AND BECOM ES INCOME TAX PAID IN RESPECT OF THE INCOME OF THE REL EVANT PREVIOUS YEAR. 8. HE CONTENDED THAT THE DECISION OF LD. CIT(A) IS ALSO SUPPORTED BY THE FOLLOWING CASE LAWS: - COMMISSIONER OF INCOME TAX VS. SASWAD MALI SUGAR FACTORY LTD. (2001) 249 ITR 756 (BOMBAY) 7 ITA NOS. 4058 & 4059/DEL/2001 IN THE ABOVE CASE THE RETURN WAS A NIL RETURN. PURSUANT TO THE ASSESSMENT COMPLETED U/S 143(3) THE TAXABLE INCOME WAS DETERMINED AT RS. 4 86 164/- ON WHICH TH E TAX WAS PAID BY THE ASSESSEE. THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHICH W AS ALLOWED AND THE ASSESSEE WAS ENTITLED TO THE REFUND . THE HONBLE BOMBAY HIGH COURT HELD THAT ON THE FACT S AND IN CIRCUMSTANCES OF THE CASE THE ASSESSEE WAS ENTITLED TO CLAIM INTEREST AS PER THE PROVISIONS OF SEC. 214(1A) OF THE INCOME TAX ACT. COMMISSIONER OF INCOME TAX JALANDHAR VS. P.K. INDUSTRIES (2008) 316 ITR 155 (PUNJAB AND HARYANA) IN THE ABOVE CASE THERE WAS NO REFUND AS PER THE R EGULAR ASSESSMENT AND A FURTHER SUM OF RS. 47 856/- WAS RE QUIRED TO BE PAID BY WAY OF TAX. BUT LATER AS A RESULT OF THE APPELLATE ORDER ASSESSMENT MADE BY THE INCOME TAX OFFICER WAS SLASHED AND THE TOTAL INCOME WAS REDUCE D TO THE EXTENT THAT THE ASSESSEE BECAME ENTITLED TO CLAIM A REFUND OF A PART OF THE ADVANCE TAX PAID BY HIM. THE ASSESSE E MADE A CLAIM THAT THE INTEREST ON THE EXCESS AMOUNT OF A DVANCE TAX BE PAID TO HIM BUT THE ITO TURNED DOWN HIS CLAI M U/S 214 AS WELL AS U/S 244(1A) OF THE ACT. THE HONBLE HIG H COURT ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE BOTH U /S 214 AND SEC. 244(1A) FOLLOWING THE JUDGMENT OF THE APEX COURT IN MODI INDUSTRIES LTD. COMMISSIONER OF INCOME TAX VS. MOTOR INDUSTRIES COMPANY (1998) 229 ITR 126 KARNATAKA HIGH COURT FACTS DURING THE PREVIOUS YEAR ENDING ON DECEMBER 31 1982 PERTAINING TO THE A.Y. 1983-84 THE ASSESSEE HAD PAID ADVANCE TAX TO THE TUNE OF RS. 9 07 19 323/-. THER E WAS ALSO DEDUCTION OF TAX AT SOURCE TO THE EXTENT OF RS . 44 427. THE ORIGINAL ASSESSMENT FOR THE PERIOD WAS COMPLETE D U/S 143(3) OF THE ACT ON FEBRUARY 25 1985. THE TAQX A SSESSED WAS AT RS. 9 16 05 911/-. THUS AS PER THE ORIGINA L 8 ITA NOS. 4058 & 4059/DEL/2001 ASSESSMENT ORDER THE PETITIONER WAS REQUIRED TO PA Y AN ADDITIONAL AMOUNT BY WAY OF TAX TO THE EXTENT OF RS . 8 42 161. ISSUE WHETHER THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE ASSESSEE WAS ENTITLED TO INTEREST U/S 214 ON THE AM OUNT OF RS. 1 20 42 846 REFUNDED BY THE INSPECTING ASSISTAN T COMMISSIONER WHILE GIVING EFFECT TO THE ORDER PASSE D BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN FIRST APPEA L. FINDINGS YES 9. THUS IT WAS SUBMITTED BY HIM THAT ORDER OF CIT( A) SHOULD BE UPHELD. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. LD. AO WHILE DENYING TH E RELIEF TO THE ASSESSEE CLAIMED BEFORE HIM BY WAY OF AN APPLICATI ON FILED U/S 154 HAS RELIED UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF LALA LUXMIPAT SINGHANIA VS. CIT (SUPRA). HE OBSERV ED THAT IN THE REGULAR ASSESSMENT WHEN THE ASSESSMENT WAS COMPLETE D THERE WAS A DEMAND RAISED AGAINST THE ASSESSEE THEREFORE NO I NTEREST WAS ALLOWABLE ON THE AMOUNT OF REFUND ARISING AS A RESU LT OF APPELLATE ORDER ACCORDING TO THE AFOREMENTIONED DECISION OF HONBLE ALLAHABAD HIGH COURT. HE REJECTED THE CONTENTION OF THE ASSESSEE R EGARDING AFOREMENTIONED AMENDMENT ON THE GROUND THAT ANY SUC H INTEREST COULD BE REDUCED OR INCREASED ONLY IN A CASE WHERE IN THE ORIGINAL ASSESSMENT THE ASSESSEE HAS BEEN ALLOWED INTEREST U/S 214(1) A ND AS IN THE CASE OF ASSESSEE NO SUCH INTEREST WAS ALLOWED TO THE ASSESS EE U/S 214 IN THE ORIGINAL ASSESSMENT THEREFORE NO INTEREST IS ALLO WABLE AT A LATER STAGE 9 ITA NOS. 4058 & 4059/DEL/2001 I.E. AFTER THE APPELLATE ORDER. HOWEVER SUCH OBSE RVATIONS OF AO ARE NOT SUPPORTED BY THE LEGAL PROPOSITION AS ACCORDING TO THE AFOREMENTIONED TWO DECISIONS ONE OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. P.K. INDUSTRIES (SUPRA) AND OTHER IN THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MOTOR I NDUSTRIES COMPANY (SUPRA). IN THESE DECISIONS IT HAS BEEN EXPLAINED THAT EVEN IF NO INTEREST WAS PAID TO THE ASSESSEE U/S 214 IN THE ORIGINAL AS SESSMENT THEN ALSO THE ASSESSEE WAS ENTITLED FOR INTEREST UNDER BOTH T HE SECTIONS NAMELY SEC. 214 AND SEC. 244(1A). IN THE CASE OF CIT VS. P.K. INDUSTRIES (SUPRA) THE ASSESSEE WAS REQUIRED TO PAY A DEMAND O F RS. 47 856/- AS A RESULT OF ORIGINAL ASSESSMENT AND SUBSEQUENTLY THE ASSESSEE BECAME ENTITLED FOR REFUND ON WHICH IT WAS HELD THAT ASSES SEE IS ENTITLE FOR GRANT OF INTEREST U/S 214 AND U/S 244(1A). IT IS IMPORTA NT TO NOTE THAT THE ASSESSMENT YEAR INVOLVED IN THAT CASE WAS A.Y. 1977 -78 WHICH IS PRIOR TO THE AFOREMENTIONED AMENDMENT BUT STILL THEIR LORDSH IPS OF HONBLE PUNJAB & HARYANA HIGH COURT HAVE HELD THAT SUCH INTEREST W AS PAYABLE TO THE ASSESSEE. IT IS EQUALLY IMPORTANT TO NOTE THAT WHI LE GRANTING THE RELIED TO THE ASSESSEE THEIR LORDSHIPS OF HONBLE PUNJAB & HA RYANA HIGH COURT HAVE REFERRED TO THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF SANDVIK ASIA LTD. VS. CIT WHEREIN THEIR LORDSHIPS OF HONBLE SUPREME COURT HAVE OBSERVED THAT EVEN THAT EVEN ASSUMING T HAT THERE IS NO PROVISION FOR PAYMENT OF COMPENSATION COMPENSATION FOR DELAY IS REQUIRED TO BE PAID AS THE ACT ITSELF RECOGNIZES IN PRINCIPLE THE LIABILITY OF THE DEPARTMENT TO PAY INTEREST WHEN EXCESS TAX WAS RETAINED AND THE 10 ITA NOS. 4058 & 4059/DEL/2001 SAME PRINCIPLE SHOULD BE EXTENDED TO THE CASES WHER E INTEREST WAS RETAINED. 10. IN THE CASE OF CIT VS. MOTOR INDUSTRIES COMPANY (SUPRA) HONBLE KARNATAKA HIGH COURT HAS ALSO EXPRESSED THE SIMILAR VIEW WHEN THE SAID CASE WAS RELATING TO A.Y. 1983-84 AND ASSESSEE WAS REQUIRED TO PAY A HUGE SUM OF RS. 8 42 161/- AND THEIR LORDSHIPS HAVE HELD THAT THE ASSESSEE WAS ENTITLED TO RECEIVE INTEREST U/S 214. IN THIS VIEW OF THE LEGAL SITUATION AFTER HEARING BOTH THE PARTIES AND APPLYING THE AFOREMENTIONED DECISIONS OF LAW WE ARE OF THE OPIN ION THAT THERE IS NO INFIRMITY IN THE ORDER OF CIT(A). WE DECLINE TO IN TERFERE AND THEREFORE DEPARTMENTAL APPEALS FOR BOTH THE YEARS ARE DISMISS ED. 11. IN THE RESULT DEPARTMENTAL APPEALS ARE DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.04.2010 (K.G. BANSAL) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. 11 ITA NOS. 4058 & 4059/DEL/2001 TRUE COPY BY ORDER DEPUTY REGISTRAR