The expression “regular assessment” in Section 214 of the Income-tax Act, 1961, should be interpreted in accordance with the definition provided in Section 2(40) of the Act, which includes an assessment made pursuant to the direction of an appellate authority.

SABYASACHI MUKHARJI, J.

( 1 ) ON December 19, 1966, the Income-Officer, E-Ward, Companies District, Calcutta, made an assessment for the assessment year 1964-65 in respect of the petitioner. The petitioner is a public limited company. In making the said assessment the Income-tax Officer treated the petitioner as a company in which the public were not substantially interested and charged the rate of tax on that basis making an additional demand of Rs. 2,62,239. On appeal on May 4, 1970, the Appellate Assistant Commissioner held that the petitioner was a company in which the public were substantially interested and the petitioner fulfilled all the conditions laid down under Section 2 (18) (b) of the Income-tax Act, 1961. Pursuant to the order of the Appellate Assistant Commissioner on January 12, 1972, the Income-tax Officer revised the assessment and computed the amount refundable to the petitioner at Rs. 4,28,260. 40. In making the computation, however, the Income-tax Officer refused to allow interest payable on the sum paid by the petitioner and refused the claim for interest made by the petitioner under Section 214 and Section 244 of the Income-tax Act, 1961. The said computation was made by the Income-tax Officer on January 12, 1972. Aggrieved by the aforesaid order, the petitioner made an application for revision under Section 264 of the Income-tax Act, 1961, to the Commissioner of Income-tax, claiming interest of Rs. 48,280 under Section 244 and Rs. 23,752 under Section 214 of the Income-tax Act, 1961. The Commissioner passed an order on November 7, 1972, and allowed the claim for interest under Section 244 of the Act but rejected the claim for interest under Section 214. In passing the said order, the Commissioner observed, inter alia, as follows :"an assessee is entitled to receive interest under Section 214 when on a regular assessment it is found that the advance tax paid by the assessee exceeds the tax determined on assessment. In the present case no part of the advance tax became refundable to the assessee on the basis of the regular assessment made on December 19, 1966, and hence no interest was paid as Section 214 was not applicable. According to the assessee interest under Section 214 should have been allowed when the assessment was revised in accordance with the direction of the A. A. C. as the A. A. C. 's order modified the assessment made by the I. T. O. I am unable to agree with this submission. This very point was considered by the Allahabad High Court in the case of Sir Shadilal Sugar and General Mitts Ltd. v. Union of India. In this case the court explained the meaning of the words'regular assessment' appearing in Section 18a (5) of the Indian Income-tax Act, 1922. The words' regular assessment' also appear in Section 214 of the Income-tax Act, 1961, and they mean the first or the original assessment order made by the I. T. O. for that year. As no amount was refundable to the assessee in the present case in accordance with the order under Section 143 (3) dated December 19, 1966, the assessee is not entitled to any interest under Section 214. "

( 2 ) IT is the propriety of the aforesaid direction or order of the Commissioner which is under challenge in this application under article 226 of the Constitution. Section 214 of the Income-tax Act, 1961, enjoins the Central Government to pay interest on the amount by which the aggregate amount of advance tax paid during the financial year exceeds the amount of tax determined on regular assessment. Therefore, the obligation is to pay interest on the amount by which the advance tax paid exceeds the tax determined on regular assessment. The question involved in this application is, whatis the "tax determined on regular assessment". Section 2 (40) of the Income-tax Act stated that unless the context otherwise requires regular assessment would mean an assessment made under Section 143 or Section 144 of the Act. The first question is whether the order which the Income-

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