1. This second appeal emanates from the order dated 14-11-1983 passed in relation to an application filed by the assessee under Section 154 of the Income-tax Act, 1961 ('the Act') claiming interest under Section 244(1A) of the Act on refund of Rs. 2,50,000. The assessment year involved is 1980-81 and the order under appeal is dated 22-6-1984 passed by the Commissioner (Appeals).
2. The necessary facts for purpose of deciding this appeal are that the assessee-company entered into a technical collaboration agreement with Sybron Corpn., New York, USA on 31-5-1979 for manufacture of electronic range of instruments. As per the agreement the assessee was to remit certain amounts by way of royalty to its foreign collaborators. On being approached the ITO directed the assessee to deduct tax 40 per cent on the amount due to be paid to the said corporation. The ITO's direction, which was in the nature of order under Section 195(2) of the Act was made subject matter of appeal and the learned Commissioner (Appeals) vide his order dated 4-3-1983 accepted the assessee's contention and gave necessary direction to the ITO for giving a finding about the situs of the transfer of the data/technical know-how in order to determine the correct tax liability.
3. As a consequence of the order under Section 250 of the Act passed on 28-3-1983 by the ITO, amount of tax to be deducted at source was reduced by Rs. 2,50,000 and the assessee was granted necessary refund along with ITNS-150A. The assessee did not appeal against the said order. Later, on 7-11-1983 an application under Section 154 was moved for getting the order of 4-3-1983 rectified and it was stated that interest under Section 244(1 A) on refund of Rs. 2,50,000 should have been granted.
4. The ITO rejected the abovestated application under Section 154 on the ground that the provisions of Section 244(1 A) were applicable only to refunds due as a result of any amount having been paid in pursuance to an order of assessment or penalty. Since according to the ITO, the payment was only an amount of tax deducted at source under Section 195, the request for grant of interest under Section 244(1 A) came to be rejected.
5. The ITO's order rejecting Section 154 application came to be affirmed by the Commissioner (Appeals), as he did not agree with the assessee's plea that the word 'assessment' used in Section 244(1 A) should be understood as any decision in general.
6. Before us Shri R. Ganeshan, chartered accountant framed two issues in relation to the memorandum of appeal, in which as many as 7 grounds are stated : (a) that refund of excess tax as determined by the order of the Commissioner (Appeals) dated 4-3-1983 should have been made alongwith interest ; and (b) that the first appellate authority erred is not considering the order under Section 195 and the order thereon under Section 250 as orders covered by Section 244(1A). Shri Ganeshan took pains to explain to us that the word 'assessment' under Section 244(1 A) should be seen and analysed in the context of related provisions, particularly Section 195. On the other hand, for the revenue Shri R.N. Bara, senior departmental representative very affectively made a short submission that assessment and its procedure is given in Chapter XIV from Sections 139 to 158 of the Act and it would be wrong and irrational to travel beyond such provisions.
7. After hearing the parties, in our view, it is unnecessary for us to involve with various arguments advanced on both the sides. We could understand the logic of the argument of Shri Ganeshan if the assessee had contested the order under Section 250, by which only refund of Rs. 2,50,000 was given but the controversy regarding interpretation of Section 244(1 A) with the help of Section 195 certainly was beyond the scope of the provision under Section 154. Shri Ganeshan in fairness accepted that he was on thin ice because the assessee's request for interest came by way of Section 154 rectification application. By simply observing that the proposition convassed before us regarding the interpretation of Section 244(1A) rest necessarily on debate and two opinions are admittedly possible, we reject the appeal on the short ground that Section 154 rectification has a limited scope and does not stipulate resolving of controversy by debates.