Commissioner of Income-tax Vs. Satyanarayan Gupta (Huf). - Court Judgment

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head note: income tax income--year of chargeability--interest on refund determined under s. 240. ratio & held : where mercantile system of accounting was followed by the assessee, income received by the assessee by way of interest under section 244 on refund determined and quantified under section 240 was not assessable in the year of receipt. application : also to current assessment years. a. y. : 1982-83 income tax act 1961 s.240 income tax act 1961 s.244 - sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the non obstante clause. the legislative intention is thus very clear that the law enacted shall have full operation and there would be no impediment. it is well settled that the definition of judgment in section 2(9) of c.p.c., is much wider and more liberal, intermediary or interlocutory judgment fall in the category of orders referred to clause (a) to (w) of order 43, rule 1 and also such other orders which poses the characteristic and trapping of finality and may adversely affect a valuable right of a party or decide an important aspect of a trial in an ancillary proceeding. amended section 100-a of the code clearly stipulates that where any appeal from an original or appellate decree or order is heard and decided by a single judge of a high court, no further appeal shall lie. even otherwise, the word judgment as defined under section 2(9) means a statement given by a judge on the grounds of a decree or order. thus the contention that against an order passed by a single judge in an appeal filed under section 104 c.p.c., a further appeal lies to a division bench cannot be accepted. the newly incorporated section 100a in clear and specific terms prohibits further appeal against the decree and judgment or order of a single judge to a division bench notwithstanding anything contained in the letters patent. the letters patent which provides for further appeal to a division bench remains intact, but the right to prefer a further appeal is taken away even in respect of the matters arising under the special enactments or other instruments having the force of law be it against original/appellate decree or order heard and decided by a single judge. it has to be kept in mind that the special statute only provide for an appeal to the high court. it has not made any provision for filing appeal to a division bench against the judgment or decree or order of a single judge. no letters patent appeal shall lie against a judgment/order passed by a single judge in an appeal arising out of a proceeding under a special act. sections 100-a [as inserted by act 22 of 2002] & 104:[dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] writ appeal held, a writ appeal shall lie against judgment/orders passed by single judge in a writ petition filed under article 226 of the constitution of india. in a writ application filed under articles 226 and 227 of constitution, if any order/judgment/decree is passed in exercise of jurisdiction under article 226, a writ appeal will lie. but, no writ appeal will lie against a judgment/order/decree passed by a single judge in exercising powers of superintendence under article 227 of the constitution. the present reference is at the instance of the commissioner of income-tax, orissa, raising the following question :'whether, on the facts and in the circumstances of the case, income received by the assessee by way of interest under section 244 of the income-tax act, 1961, on refund determined and quantified under section 240 of the said act was not assessable in the year of receipt ?'the facts indicate, inter alia, that the assessee is a hindu undivided family. the assessment year involved was 1982-83 and the accounting year ended on october 27, 1981. the assessee, on april 22, 1981, received income-tax refund and also interest thereon under section 244 of the income-tax act. the assessee pleaded before the income-tax officer that the interest received by it should have been spread over because it followed the mercantile system of accounting which the income-tax officer refused. on appeal, the appellate assistant commissioner restored the matter to the file of the income-tax officer directing him to verify whether, in fact, the mercantile system of accounting was followed by the assessee and it was directed that if it was found that the system of accounting was mercantile, then the assessees contention was to be accepted. on appeal by the revenue, the tribunal found that the assessee was maintaining the books of account on the basis of the mercantile system of accounting.it is brought to our notice that in jagannathram gangaram v. cit [1995] 212 itr 291, this court had decided that in view of the finding that the assessee was maintaining its accounts on cash basis, the tribunal was justified in holding that the interest was assessable for the relevant year. following the ratio of the said decision, we answer the question in favour of the assessee and against the revenue.