In this appeal by assessee, only issue involved is regarding claim of interest under section 244(IA) in respect of self-assessment tax paid which was refunded. According to assessee, it is not disputed by department that payment was made after 1-4-1975 but what us being disputed is that self-assessment tax is not amount paid as consequence of assessment order and, therefore, interest is not allowable. Reference was made to PROVISIONS contained in section 140A (2) where it has been mentioned that after regular assessment has been made amount that is paid as self- assessment tax shall be deemed to have been paid towards such regular assessment, in view of this provision, claim of assessee is fully justified that it should be treated as payment made as consequence of regular assessment. Reliance was also placed in Delhi High Court decision in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India [1981] 130 ITR 928. department relied on orders of authorities below. 2. After carefully considering submissions, we are of view that claim of assessee is reasonable and should be allowed. provisions of section 140A (2) clearly provides that after regular assessment under section 143 or 144 has been made, any amount paid under sub-section (1) shall be deemed to have been paid towards such regular assessment. Section 244(IA) talks of interest payable as consequence of refund that has been granted to assessee in pursuance of order of assessment. Therefore, reading of provisions of above sections, claim of assessee has only to be allowed. Delhi High Court in case of National Agricultural Co-operative Marketing Federation of India Ltd. (supra) have made categorical observation that since as consequence of assessment made, tax that are paid as advance tax has to be treated as amounts paid as consequence of assessment. Therefore, we allow this appeal of assessee. Per Shri S. S. Mehra, Judicial member - I have benefit of perusing order framed by learned Accountant Member, Shri A. Kalyanasundharam. It is, however, regretted that I could not agree with conclusion arrived at in his order. facts by and large are not in dispute and have in facet been detailed by my learned brother. issue pertains to allowance of interest u/s. 244(IA) of Income-tax Act, 1961. Such interest was claimed by assessee with respect to refund which became due out of self-assessment tax paid. 2. Section 244(IA) deals with interest on refund consequent upon order passed in appeal or other proceedings. In fact this special section deals with situation arising out of section 240 of Act. We are in present case concerned with situation covered u/s. 244(IA) of Act. sub-section contemplates that interest at rates specified in sub-section (1) of section 244 will be allowable to assessee where refund was due to assessee as result of any amount having been paid after 31st day of March, 1975 in pursuance of any order of assessment or penalty. In case before us payment was made u/s. 140A and 244(IA) makes it abundantly clear that facts of assessee's case do not warrant allowance of any interest as refund was not due order of assessment or penalty. assessee's refund was out of self-assessment tax. 3. Section 140A (2) deals with situation where tax once paid becomes payment towards regular assessment only after assessment is framed. Same is ratio in case of National Agricultural Co-operative Marketing Federation of India Ltd. (supra), relied upon by learned brother with proposition of law becomes tax paid towards such regular assessment, it has got different character, i.e. it was self-assessment tax. On account of this factual position refund out of self-assessment tax does not fit in frame of language of section in 244(IA). Thus is my view disallowance of interest was rightly made by learned ITO and such action of learned ITO was correctly confirmed by learned CIT (A). Keeping in view undisputed factual position and law on point learned CIT (A)'s finding does not warrant any interference and same is confirmed. 4. In result appeal is dismissed. ORDER UNDER SECTION 255(4) OF INCOME-TAX ACT. Consequent upon difference of opinion matter is being placed before Hon'ble President for proceeding in matter in light of above section. difference of opinion is as under: "Whether on facts and in circumstances of case assessee was entitled to interest u/s 244(IA) of Act on refund due out of self- assessment tax paid?" THIRD MEMBER ORDER Per Dr. S. Narayanan, Vice President (WZ) - difference of opinion having arisen between Members, who originally heard this appeal, the, matter has come to be referred to me by President under section 255(4). point of difference is as under: "Whether on facts and in circumstances of case, assessee was entitled to interest u/s. 244(IA) of Act on refund due out of self- assessment tax paid?" 2. assessee is Pvt. Ltd. Company. assessment, for this year was completed on 18-9-1978 on total income of Rs. 3,20,630. assessee had made following payments as self-assessment tax (under sec. 140 A): Date Amount paid 29-12-1975 53,107 19-7-1977 75,000 After assessment was finalised on 18-9-1978, assessee paid various amounts, amounting in all to Rs. 27,000 in period 25-3-1980 to 15-3- 1982. 3. By application under sec. 154 dated 28-3-1982, assessee requested that interest under section 244(IA) on refund arising out of tax paid in excess be granted to it. ITO, however, rejected this prayer on ground that, no such interest was allowable as regards payments made under sec. 140 i.e. such payments could not be deemed to be payments made"in pursuance of assessment". assessee appealed. 4. Commissioner (A), first of all, recorded following additional facts: (a) assessee was allowed refund of Rs. 66,800 on 26-3-1983 in pursuance of order of rectification dated 21-10-1982. It was further allowed refund of Rs. 22,000 on 4-2-1983. (b) assessee was asked to pay Rs. 27,000 by instalments after completion of assessment on 18-9-1978. This payment was made on different dates between March 1980 and March 1982. (c) assessee, by application under sec. 154 dated 28-7-1983 requested for interest on refund of Rs. 66,800 and Rs. 27,000 noted above, i. e, at Rs. 93,800 on ground that said payments were made after 1-4-1975 and interest at rate of 12 per cent per annum was payable by Govt. u/s. 244(IA). (d) ITO rejected request. Though he did not mention it in his order he did consider point that interest could not be allowed under sec. 244(IA) where refund was granted as result of rectification under sec. 154 , as such order was not covered by expression "other proceedings" used in sec. 240. 5. Commissioner (A) then noted that section 244 had two subsections. both o f which are relevant for allowing interest to assessee on refunds. He extracted, therefore, relevant provisions as under: 244. Interest on refund where no claim is needed. -(1).... (carries reference to refunds issued under orders mentioned in sec. 240). (IA) Where whole or any part of refund referred to in sub-section (1) is due to assessee, as result of any amount having been paid by him after 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having being found in appeal or other proceeding under Act to be in excess of amount which such assessee is liable to pay as tax or penalty. as case may be, under this Act, Central Govt. shall pay to such assessee simple interest at rate specified in sub section (1) on amount so found to be in excess from date on which such amount was paid to date on which refund is granted." further points made by Commissioner (A) were as follows: (i) term "other proceeding" found in sec 240 was comprehensive enough to cover proceedings under sec. 154 also (Sec. 240 provides that "where as result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to assessee, ITO shall, except as otherwise provided in Act, refund amount to assessee without his having to make any claim in that behalf). (ii) contention that interest on refund cannot be allowed because payments were made under sec. 140A and not in pursuance of regular assessment, cannot be accepted fully. Out of refund of Rs. 66,800 issued on 26-3-1983, Rs. 5000 was in respect of payment made in March 1980. That was in pursuance of order of regular assessment. Hence interest on Rs. 5000 had to be allowed from date of payment to date of refund, that is 26-3- 1983. balance of Rs. 61,800 was refund of self-assessment tax and that was not covered under sec. 244(1A). However, interest on this refund has to be allowed under sec. 244(1) as refund arose from rectification order dated 21-10-1982 even though refund issued on 26-3-1983. Interest was payable at rate of 12 per cent after expiry of three months from end of month in which order under sec. 154 was passed. Sec. 244(1) /Rule 119A of Income-tax Rules, 1962 entitled assessee to interest at rate of 12 per cent for one complete month i.e. for months of Feb. 1983. Hence ITO had to allow interest at rate of 12 per cent per annum on Rs. 61,800 for one month. (iii) As regards interest on refund of Rs. 22,000 granted on 4-10-1983 there could be no doubt that payment of tax of Rs. 22,000 was made in pursuance of order of regular assessment by installments on different dates. Interest at rate of 12 per cent per annum was clearly payable from dates of payment of each of instalments to date of refund, i.e. 4-10-1983 after excluding in each case one month as required under second proviso to sec. 244(IA). major dispute between ITO and assessee regarding dates of cases were made by cheques, which were cleared by banks on different dates later than dates on which they were tendered. Under Treasury Rules, where payment is made by cheque; date of tendering cheque at bank had to be taken as date of payment of Govt. dues, subject to cheque being honoured. ITO should. therefore, ascertain dates of payment in accordance with above position and compute interest payable to assessee on that basis. Department accepted above order, but assessee came up in appeal raising following contentions: "1. On facts and circumstances of case, CIT (A) erred in holding that refund of Rs. 61,800 paid on self- assessment tax paid u/s. 140-A was not eligible for interest under sec. 244(1A). 2. learned CIT (A) erred in law in holding that self-assessment t ax paid us. 140-A is not payment in pursuance of order assessm ent." 6. learned Accountant Member, who wrote leading order, held as under: (a) payment of Rs. 61,800 was made after 1-4-1975. It was self-assessment tax. In light of sec. 140-A (2) it had to be taken as payment made in presence of regular assessment. Sec. 140-A (2) provides that after regular assessment under section 143 or sec. 144 has been made any amount paid under sec. 140- (1) (self-assessment tax) shall be deemed to have been paid towards such regular assessment. (b) Sec. 244(IA) read with sec. 140-A (2) authorised payment of interest on self-assessment tax paid by assessee. (c) above position was in line with decision in National Agricultural Co-operative Marketing Federation of India Ltd.'s case (supra). assessee's appeal would, therefore, succeed. 7. learned Judicial Member, however, disagreed. According to him, Commissioner (A) was correct in denying interest on self-assessment tax paid. He made following points in his order: (a) Sec. 244(IA) is special section dealing with situation arising out of sec. 240 of Act. Refund arose here on account of payment of self-assessment tax. There was no dispute on this. refund was not out of any amount paid by assessee in pursuance of order of assessment or penalty. With such king of refunds, section 244(IA) was not concerned. (b) Sec. 140-A (2) deals with situation where tax once paid, becomes payment towards regular assessment only after assessment is framed. This was ratio of National Agricultural Co- operative Marketing Federation of India Ltd.'s case (supra). There could not be any dispute on this proposition. But before self-assessment tax becomes tax paid towards such regular assessment, it carries different character, i.e. it was self-assessment tax. Hence it is not covered by language of sec. 244(IA). Commissioner (A) was therefore, correct in his order. 244(IA). Commissioner (A) was therefore, correct in his order. It is because of above position, that question referred to in paragraph 1 supra, was referred to Third Member by President. 8. Shri K. N. Butani, learned counsel for assessee referred to facts of case. In particular, he pointed out that assessee objected to finding that interest was not payable on refund amounting to Rs. 61,800 as noted by Commissioner (A) also. amount of Rs. 61,800 indisputable relates wholly to self-assessment tax paid by assessee. Shri Butani drew attention to following passage from judgment in National Agricultural Co- operative Marketing Federation of India Ltd's case (supra): "The second alternative is to read this section harmoniously with provisions contained in Chapter XVII-C and in particular s. 219. Acting on logic, we have followed in our earlier discussion that payment of advance-tax has material significance only till initial regular assessment is made and that thereafter it has no separate existence by itself but gets merged in tax demand payable by assessee, it would be seen that even payment of advance-tax can be worked into provisions of s. 244(IA). On language of s. 219 advance-tax is treated as payment of tax for assessment year and is given credit for at time of regular assessment, This means that when regular assessment is made in first instance, advance-tax paid earlier is treated as having been paid in presence of regular assessment and in satisfaction thereof. Thus, advance-tax paid earlier will get converted into payment on date of initial assessment of tax due for assessment year." 9. Shri Butani referred to sec. 219 in this regard. That provides that any sum (other than penalty or interest) paid or recovered from assessee as advance-tax in pursuance of Chapter XVII shall be treated as payment of tax in respect of previous year relevant for assessment year concerned and credit therefor shall be given to assessee in regular assessment. point stressed by Shri Butani in this regard is that when one compares language of section 219 with that of section 140-A (2) , it would be seen that position stated by section 140-A (2) is even clearer and expressed in ker language. In other words, applying ratio of National Agricultural Co- operative Marketing Federation of India Ltd.'s case (supra), assessee's claim here should succeed without doubt. No doubt, as learned judicial Member has stated in his order it bears character of self-assessment tax up to completion of assessment, but only up to that stage. Thereafter, it loses that identity and in terms of section 140-A (2) it cannot but he looked upon as tax paid "towards such regular assessment". Interest under section 244(IA) was, therefore, rightly allowable on Rs. 61,800 also. 10. Shri B. K. Haldar, Departmental Representative, placed k reliance on t h e orders of learned Judicial Member as well as Commissioner (Appeals). He also referred to decision in Bardolia Textile Mills v. ITO [1985] 151 ITR 389 (Guj.) (FB). In that case, it was pointed out that section 244(IA) does not apply to amounts paid in pursuance of any order of assessment or penalty that section 214(1) and 244 operate in different fields: and that section 244 was not determinative of construction in to be placed on section 214(1). 11. With regard to National Agricultural Co-operative Marketing Federation of India Ltd's case (supra), Departmental Representative placed copy of order of Supreme Court in Civil Misc. Petition No. 26717 of 1983 dated 26- 11-1984. Supreme Court ordered as under in that matter on application of CIT Delhi-II, New Delhi, respondent being National Agricultural Co- operative Marketing federation of India Ltd.'s case (supra) "The application for stay above-mentioned being called on for bearing before this court on 26th day of November, 1984, upon hearing counsel for t h e parties herein, this Court both order that pending hearing and final disposal by this court of appeal above-mentioned, there shall be interim stay of judgment and order dated 17th Sep. 1980 of Delhi High Court at New Delhi in writ Petition No. 878 of 1978 directing payment of interest under sections 214 and 244(IA) of IT Act." Shri Haldar submits that, as result of above interim stay order, decision of Delhi High Court in National Agricultural Co-operative Marketing Federation of India Ltd.'s case (supra) is no longer operative and hence Tribunal should follow decision in Bardolia Textile Mills 'case (supra). contention for department, therefore, is that there was no merit in assessee's claim for interest on self-assessment tax refund also. 12. I have considered position. I may first refer to Bardolia Textile Mills' case (supra). In that case, question raised before court (by way of writ petition under Article 226 of Constitution) was, whether ITO should be directed to pay interest under section 214(1) of Act on advance tax paid in excess of amount of tax determined on regular assessment. controversy before court concerned meaning of expression "Regular Assessment" used in section 214(1). interpretation of section 244(1A) was not directly in controversy matter. observation of Gujarat High Court in Barodlia Textile Mills'case (supra) could hence be looked upon as obiter dicta and to that extent they do have persuasive effect. 13. According to departmental representative National Agricultural Co- operative Marketing Federation of India's Ltd.'s case (supra) is no longer operative in rem, so to speak, because of interimstay order of Supreme Court. I am unable to accept this position as correct. stay Order affects only parties to dispute before Supreme Court. ratio of judgment in National Agricultural Co-operative Marketing Federation of India Ltd.'s case (supra) being that of jurisdictional High Court could still bind subordinate Tribunals functioning in Union territory of Delhi. There is no getting away from this. Applying ratio of National Agricultural Co-operative Marketing Federation of India Ltd's case (supra), there can be no room for holding that self- assessment tax is not covered by section 244(IA). When that section is read with section 140A (2) it has to be held in light of National Agricultural Co- operative Marketing Federation of India Ltd.'s case (supra) that payment of Rs. 61,800 was amount paid in pursuance of order of assessment. I would, therefore, agree with view expressed by learned Accountant Member and hold that interest on refund of Rs. 61,800 is due to assessee in terms of section 244(IA). 14. matter will now go back to Bench which originally heard appeal for disposal in accordance with law. *** PHELPS & CO. (P) LTD. v. INCOME TAX OFFICER