Mitsui Engineegin & Ship. C Vs ADIT (Delhi High Court)
The writ petition challenged the order dated 20.01.2005 passed by the Director of Income Tax, International Taxation, New Delhi, whereby the petitioner’s application under Section 154 of the Income Tax Act, 1961 seeking additional interest under Section 244(1A) was dismissed.
The petitioner submitted that the impugned order rejecting the claim for interest was based on the judgment of the Bombay High Court in Sandvik Asia Ltd v. Commissioner of Income Tax-1 (2004) 267 ITR 78 (Bom). It was contended that the said judgment had subsequently been reversed by the Supreme Court by judgment dated 27.01.2006 reported in [2006] 280 ITR 643 (SC).
After hearing the parties and noting that the Bombay High Court judgment relied upon in the impugned order had been upturned, the Court was persuaded to allow the writ petition. The order dated 20.01.2005 passed by the Director of Income Tax, International Taxation was quashed.
The Court directed the competent authority, stated to be the Commissioner of Income Tax, to pass a fresh order within three months from the date of placing a certified or web copy of the Court’s order. While calculating the amount of interest, the competent authority or the Assessing Officer was directed to take into account the extant provisions of law, including the rate of interest applicable from time to time.
