V. K. Singhal, J.
1. The Income-tax Appellate Tribunal has referred the following question of law arising out its order dated January 13, 1986, in respect of the assessment year 1979-80 under Section 256(1) of the Income-tax Act, 1961 :
' Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in allowing interest on the refund of tax under Sections 214 and 244(1A) of the Income-tax Act, 1961, while interest under Section 244(1A) is allowed only on the refund of the amount of tax paid in pursuance of an assessment and not on the advance tax and that interest under Section 244(1A) is a debatable point and provisions of Section 154 of the Act, were not applicable ?'
The brief facts of the case are that the assessee has paid tax at source and advance tax of Rs. 38,500. The assessment was completed at a figure of Rs. 10,70,670. The advance tax and TDS was adjusted against the tax liability created of Rs. 6,18,311. On appeal, the assessment was completed at a minus figure of Rs. 4,62,270. The TDS and advance tax paid by the assessee was, therefore, liable to be refunded. The assessee claimed interest under Section 214 up to the date of regular assessment and under Section 244(1A) up to the date of the order giving effect to the appellate order. The Inspecting Assistant Commissioner held that regular assessment meant the date of initial order of assessment and not the ultimate order, and, therefore, the assessee was not entitled to interest under Section 214. It was also held that the provisions of Section 244(1A) apply to a case where the amount was paid by the assessee in pursuance of an assessment order and the provisions were not applicable where the amount had already been paid as advance tax. It was also observed that in any case the interest cannot be allowed under Section 154. In appeal to the Commissioner of Income-tax (Appeals), it was held that the decision of the Delhi High Court in the case of National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India : [1981]130ITR928(Delhi) is fully applicable to the facts of the present case and, therefore, the Inspecting Assistant Commissioner (Assessment) was directed to allow the interest on the refunded amount. The Income-tax Appellate Tribunal relying on its earlier decision in the case of IAC v. Associated Stone Industries (I. T. A. Nos. 181 and 182/(JP) of 1984--decided on November 14, 1985 ), held that the interest from the date of regular assessment under Section 244(1A) is payable on the ground that the amount paid as advance tax stands adjusted against the demand made by the Department in pursuance of the assessment order. Therefore, the assessee is entitled to interest even in the proceedings under Section 154. Sectipn 244(1A) reads as under :
' (1A). Where the whole or any part of the refund referred to in Sub-section (1) is due to the assessee, as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such assessee simple interest at the rate specified in Sub-section (1) on the amount so found to be in excess from the date on which such amount was paid to the date on which the refund is granted :
Provided that, where the amount so found to be in excess was paid in instalments, such interest shall be payable on the amount of each such instalment or any part of such instalment, which was in excess, from the date on which such instalment was paid to the date on which the refund is granted.
Provided further that no interest under this sub-section shall be payable for a period of one month from the date of the passing of the order in appeal or other proceeding.
Provided also that where any interest is payable to an asaessee under this sub-section, no interest under Sub-section (1) shall be payable to him in respect of the amount so found to be in excess. '
The various conditions contemplated by Sub-section (1A) of Section 244 are --
(a) a refund should be due to the assessee,
(b) the amount should have been paid after March 31, 1975, of which refund is claimed,
(c) the amount should have been paid in pursuance of any order of assessment or penalty, and
(d) the refund should arise out of the appellate order or other proceedings under the Act.
The judgment which was relied upon by the Commissioner of Income-tax (Appeals) was on the fact that interest under Section 244 was allowed but the claim of the assessee under Section 214 was rejected. It was held ,in that case that on a reading of Section 214(2) and Section 244(1A), the assessee is entitled to refund of the advance tax due to it from the date of initial payment right up to the date on which the refund was actually made. The petitioner in that case had claimed interest only up to the date of the revised assessment and the High Court allowed interest to the petitioner only up to that date. In the present case, the assessee claimed interest under Section 214 up to the date of regular assessment and under Section 244(1A) up to the date of the order giving effect to the appellate order. A copy of the. application dated February 24, 1984, made under Section 154 or the copy of the order passed by the Income-tax Officer thereon have not been filed along with the statement of the case. The Commissioner of Income-tax (Appeals) found that the assessee is entitled to refund of Rs. 38,500 which was paid as tax deducted at source and advance tax. The dispute was with regard to the interest on this amount. This court in the case of CIT v. M.L. Sanghi has held that the original order of the Income-tax Officer no longer survives after the modification in the manner made by the Appellate Assistant Commissioner and the only order of regular assessment in existence as a result of the appellate order was the order of the Income-tax Officer which was made in compliance with the directions given in the appellate order. Therefore, where an assessee was found entitled to a refund of the excess amount of tax deposited by him as a consequence of the order made in appeal, he would also be entitled to interest under Section 214(1) on the amount of refund. The Tribunal has held that the assessee would be entitled to interest in accordance with the decision given in the case of Associated Stone Industries (supra). In that case, the provisions of Section 244(1A) were considered and relying upon the decision of the Delhi High Court it was held that it cannot be said to be a mistake apparent from the record, but requires detailed discussion and the Inspecting Assistant Commissioner was not justified in withdrawing the interest already granted under Section 244(1A). Thereafter, only a line was written that -
' Even on merits, by placing reliance on the Delhi High Court judgment, supra, we arc of the view that there interest was rightly granted to the assessee. '
2. The dispute in the case of Associated Stone Industries (supra) was with regard to the payment of interest under Section 244(1A) which, according to the Revenue, is not payable on self-assessment tax and is payable only on the payment of tax consequent to assessment. From a reading of the order of the. Tribunal, it appears that the order of the Tribunal is contradictory in itself. While dealing with the matter of interest on refund under Section 244(1A), it was said that the matter requires elaborate discussion and is outside the purview of Section 154. Since no amount was deposited in pursuance of an order of assessment, the provisions of Section 244(1A) are not attracted. The assessee is, however, entitled to interest on the amount deposited as advance tax under Section 214 in accordance with the order given by this court in the case of CIT v. M.L Sanghi .
3. Consequently, the reference is answered accordingly.