M/S. R.R. HOLDING P. LTD. versus COMMISSIONER OF INCOME TAX, DELHI AND ANR.

Citation: [2006] SUPP. 3 S.C.R. 787 · Decided: 21-07-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

A 
MIS. R.R. HOLDING P. LTD. 
v. 
COMMISSIONER OF INCOME TAX, DELHI AND ANR. 
JULY 21, 2006 
B 
[ARIJITPASAYAT ANDLOKESHWAR SINGH PANTA,JJ.] 
Income tax Act, 1961: 
Sections 244(/A), 260A-Jssue relating to interest on refund-High c 
Court held that assessee 's case was covered by Modi Industries case and no 
reference was necessary-In subsequent assessment order in respect of the 
same assessee, Tribunal took different view and appeal filed by Revenue 
against the tribunal's order was admitted by High Court-Appeal to Supreme 
Court-Held: Undisputedly a question of law is involved which is required D 
to be adjudicated more particularly when for the subsequent year an appeal 
has been admitted and the basic question to be considered has been 
formulated-Hence, matter remitted to High Court for formulating appropriate 
question in respect of the assessment year in question and to hear the matter 
afr~h 
E 
Appellant tiled return for Assessment Year 1986-87 on 20.6.1986 
claiming carry forward loss of Rs.15,326/-. On 23.6.1987 again it showed 
carry forward loss less by 10,100/- due to deduction of tax at source. It was 
accepted on 29.7.1987. Meanwhile Government learnt that a Japanese Co. is 
paying a coml!lission of Rs.1.61 crores on some purchases made by F 
Government through appellant. By letter dated 17.8.1987, assessee admitted 
this. Since assessment had been completed earlier, assessee was issued notice 
dt. 31.8.1987 u/s. 148 of the Income Tax Act. On that very day, assessee 
offered for assessment, an income ofRs.1.61 crores and stated that requisite 
tax had been deposited on 19.8.1987 and 27.8.1987. On the question of grant G 
of interest on refund u/s.244(1A), Assessee preferred an appeal to the High 
Court u/s. 260A. High Court held that no reference was required as the case 
was covered by decision in Modi Ind~stries v. CIT. Hence the present appeal. 
787 
H 
788 
SUPREME COURT REPORTS [2006] SUPP. 3 S.C.R. 
A 
In another similar case of the assessee for the subsequent assessment 
year, Tribunal had held that Modi Industries Case was not applicable. Revenue 
has questioned the correctness of the judgment and the appeal has been 
admitted by the High Court. 
Disposing of the appeal and remitting the matter to High Court, the 
B Court 
HELD: 1. Section 244(1) of the Income Tax Act, 1961 covers a case 
where 4 ingredients are present. They are: (a) there is a refund due, (b) The 
whole or part of the refund referred to in Section 244(1) is due as a result of 
C any amount having been made after 31st March, 1975, (c) The payment must 
be made pursuant to any order of assessment or penalty, (d) Such amount or 
any part thereof as paid is found in appeal or other proceedings under the 
Act to be in excess of the amount which such assessee is liable to pay as tax 
or penalty. The assessee has to establish that he fulfils all the above conditions. 
D 
(791-F, G( 
2. In view of the aforesaid position it is but appropriate that the High 
Court should hear the matter afresh. Undisputedly a question oflaw is involved 
which is required to be adjudicated more particularly when for the subsequent 
year an appeal has been admitted and the basic question to be considered has 
E been formulated. In the instant case, appropriate question relevant to the 
assessment year in question shall be formulated. (791-G-H( 
Modi Industries Limited & Ors. v. CIT & Anr., (1995) 216 ITR 759 SC, 
referred to. 
F 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3088 of2006. 
From the Judgment and Order dated 19.2.2004 of the High Court of Delhi 
at New Delhi, in Income Tax Appeal No. 259/2002. 
C.S. Agarwal, Rahul Gupta, Nupur Kanungo and Bhargava V. Desai for 
G the Appellant. 
H 
Mohan Parasaran, A.S.G., Anuvrat Sharma, Rajshekhar Rao, Sanjay 
Kumar Singh and B.V. Balaram Das for the Respondents. 
The Judgment of the Court was delivered by 
• 
R.R. HOLDING P. LTD. v. COMMR.OFINCOMETAX, DELHI [PASAYAT,J] 
789 
ARIJIT PA.SAY AT, J. Leave granted. 
Appellant calls in question legality of the order passed by a Division 
Bench of the Delhi High Court dismissing the appeal filed under Section 
260(A) of the Income Tax Act, 1961 (in short the 'Act'), holding that no 
reference was necessary. 
The High Court held that the Income Tax Appellate Tribunal (in short 
the 'Tribunal') examined the matter in detail and came to hold as to what was 
the date of assessment. This was a question of fact which was not required 
A 
B 
to be examined in an a

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