S.H. Kapadia, J.
1. On March 30, 2001, the appeal was dismissed with reasons to be recorded separately subsequently. We, accordingly, now, hereby give reasons for dismissing the appeal.
2. Facts :
A return of income was filed on January 24, 1983. It was a nil return. The assessment was completed under Section 143(3) on July 25, 1983. Under the said order, the Assessing Officer arrived at the total taxable income of Rs. 4,86,164. Being aggrieved, the assessee went in appeal to the first appellate authority. The appeal was allowed vide order dated December 11, 1987. While giving effect to the order of the Commissioner ofIncome-tax (Appeals), the Assessing Officer granted to the assessee a refund of. Rs. 3,22,211 which included interest under Section 214 amounting to Rs. 90,402. This order was passed on October 24, 1988. At this stage, it may be noted that Section 214 of the Act was amended by the Taxation Laws (Amendment) Act, 1984, with effect from April 1, 1985, and by virtue of the amending Act, Sub-section (1A) was substituted. In other words, the Assessing Officer passed the order giving effect to the order passed by the Commissioner of Income-tax (Appeals) after the Taxation Laws (Amendment) Act, 1984, came into force. By order dated December 4, 1989, passed under Section 154 of the Income-tax Act, the interest granted under Section 214 amounting to Rs. 90,402 came to be withdrawn. The said amount of interest was for 39 months commencing from April 1, 1980, up to July 24, 1983. The order passed under Section 154 was passed by the Assessing Officer on December 4, 1989. Being aggrieved, the assessee went in appeal, once again, to the Commissioner of Income-tax (Appeals). The appeal was dismissed. The matter was carried by the assessee to the Tribunal which allowed the appeal in favour of the assessee and, therefore, the Department has come by way of appeal under Section 260A of the Income-tax Act.
3. On the above facts, the following question of law arises for determination :
'Whether, on the facts and in the circumstances of this case, the assessee was entitled to claim interest as per the amended provisions of Section 214(1A) of the Income-tax Act, 1961 ?'
4. Arguments :
Learned senior counsel for the Department contended that, in the present matter, the order of regular assessment was passed on July 25, 1983. He contended that Section 214 was amended by the Taxation Laws (Amendment) Act, 1984, only with effect from April 1, 1985. He accordingly contended that Taxation Laws (Amendment) Act, 1984, has no application to the facts of the case. He contended that under the law prevailing prior to the Taxation Laws (Amendment) Act, 1984, interest was payable only from the date on which the order of regular assessment was passed and since in the present case the order has been passed on July 25, 1983, the Assessing Officer erred in granting interest under Section 214 from April 1, 1980. He, therefore, contended that the order passed under Section 154 withdrawing the benefit of interest has been correctly passed.
5. Findings :
We do not find any merit in this appeal. In this appeal, we are concerned with the assessment year 1980-81. Sub-section (1A) was substituted in Section 214 with effect from April 1, 1985. It not only refers to the appellate orders under Section 250 and Section 254 but it also refers to several other orders like orders under Sections 147, 154, 155, 260, 262, 263, 264 and 245D. In the case of Modi Industries Ltd. v. CIT : [1995]216ITR759(SC) , it has been held that even after the amendment of Section 214 with effect from April 1, 1985, the period for which the interest has to be paid remains the same, i.e., from the first day of the relevant assessment year up to the date of the regular assessment (first assessment). In the aforestated judgment, the Supreme Court has confirmed the decision of this court in the case of CIT v. Carona Sahu Co. Ltd. : [1984]146ITR452(Bom) . However, it is urged on behalf of the Department that in the present matter the Taxation Laws (Amendment) Act, 1984, has no application. That, the said amending Act does not operate retrospectively. That, in the present matter, the regular assessment was completed on July 25, 1983. That, since the Taxation Laws (Amendment) Act, 1984, has been brought into force with effect from April 1, 1985, i.e., after the passing of the regular assessment order, the Assessing Officer erred in granting interest to the assessee with effect from April 1, 1980. We do not find any merit in this argument. The Taxation Laws (Amendment) Act, 1984, is procedural in nature and, therefore, it will apply to all pending actions. Secondly, in the present matter, the right to receive the interest accrued to the asses-see only on October 24, 1988, when the Assessing Officer gave effect to the order of the first appellate authority dated December 11, 1987, by which the assessee's appeal came to be allowed. Therefore, the amending Act, 1984, would apply to this case. Lastly, a bare reading of Section 214(1A) indicates that the said Section 214(1A) would apply to all cases where interest becomes payable as a result of an order under Section 147 or Section 154 or Section 250 or Section 254 or Section 262 or Section 263. Therefore, the Taxation Laws (Amendment) Act, 1984, is applicable to this case and we do not find any merit in the contention of the Department that the said amending Act is not applicable to the facts of this case.
6. Accordingly, the above question is answered in the affirmative, i.e., in favour of the assessee and against the Department.
7. The appeal is, accordingly, dismissed with no order as to costs.
8. C. C. expedited.