Judgment:
Ruma Pal, J.
1. The assessment year in question is 1973-74. The petitioner had paid advance tax. An order was passed under Section 141A of the Income-tax Act, 1961 (referred to as 'the Act'), by which an amount of Rs. 23,20,294 was found to be refundable to the petitioner being the difference between the advance tax paid and the amount of tax to which the petitioner was assessed.
2. On September 4, 1975, the petitioner filed an application under Section 154/155 of the Act for modification of the assessment order for the year 1973-74 on the ground that the provisions for deduction of gratuity has been wrongly disallowed by the Income-tax Officer. The petitioner's application was partially accepted by the Income-tax Officer and the assessment was, accordingly, modified on November 24, 1976. The petitioner preferred an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner allowed the petitioner's appeal by an order dated January 28, 1977. On January 31, 1977, the Income-tax Officer gave effect to the Appellate Assistant Commissioner's order and determined the amount of refund payable at Rs. 2,31,248 after adjusting the amounts already refunded.
3. The petitioner thereafter made two applications. The first application was for rectifying the computation of total income in the order dated January 31, 1977. The second application was for payment of interest under Section 214 of the Act. The first application was allowed, but no order was passed on the second application.
4. In the meantime, the Income-tax Officer had preferred an appeal from the Appellate Assistant Commissioner's order, dated January 31, 1977. The order of the Appellate Assistant Commissioner was upheld by the Tribunalwith a slight clarification. On June 8, 1979, the Income-tax Officer revised the assessment in terms of the order of the Tribunal dated April 17, 1978.
5. According to the petitioner, it is this order dated June 8, 1979, which is the date of regular assessment for the purpose of Section 214 of the Act.
6. No interest being granted to the petitioner, the petitioner made an application under Section 264 of the Act before the Commissioner of Income-tax on October 26, 1979, claiming interest on the amount of tax refunded to the petitioner.
7. The petitioner's application under Section 264 was dismissed by the Commissioner of Income-tax by an order dated April 7, 1980. The petitioner has challenged this order by way of an application under Article 226 of the Constitution.
8. Before completing the recital of the facts, it is necessary to note that, in the interim period, the original petitioner, namely, the Indian Tube Co. Ltd. has been amalgamated with TISCO Ltd. (Tube Division), as a result of which TISCO Ltd. (Tube Division) has taken over the rights, assets and liabilities of the original writ petitioner.
9. In the impugned order, respondent No. 1 has rejected the petitioner's contention by stating that, although the Calcutta High Court had held that an assessee was entitled to interest on such refund calculated up to the date of the order passed consequent upon an appeal or revision of the original assessment, this view had not been accepted by the Bombay High Court, the Allahabad High Court and the Kerala High Court. Respondent No. 1, accordingly, chose to accept the view of the Bombay, Allahabad and Kerala High Courts in preference to the view of the Calcutta High Court.
10. In my view, the order of respondent No. 1 cannot be sustained on the simple ground that respondent No. 1 is an authority operating within the State of West Bengal and is bound by the decisions of the High Court of this State (see CIT v. Indian Press Exchange Ltd. : [1989]176ITR331(Cal) ; East India Commercial Co, Ltd. v. Collector of Customs : 1983(13)ELT1342(SC) ).
11. In that view of the matter, the impugned order must be set aside and the Commissioner is directed to consider the matter afresh in keeping with the decisions of this court after giving the petitioners an opportunity of being heard. At least 48 hours' clear notice must be given to the petitioners. The Commissioner will communicate the final order to the petitioner within eight weeks from the date of hearing.
12. It is stated by the respondent authority that the question of what would be a regular assessment within the meaning of Section 214 of the Act is pending before the Supreme Court in the matter in S. L. P. (Civil) No. 6931 of 1985--CIT v. Binod Mills Co. Ltd. (see [1992] 195 ITR 151). However, no stay appears to have been granted in those proceedings. Furthermore, sitting singly, I am bound by the decisions of the Division Bench of this court which has stated the law authoritatively and repeatedly on the issue.
13. The operation of the order is stayed till three weeks after the reopening, i.e., till November 23, 1992.
14. The impugned order is quashed and the rule is made absolute.
15. There will be no order as to costs.
16. Let xerox copies of this order be given to the parties on usual terms.