ITA No.516 of 2006 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 516 of 2006 Date of decision: 6.12.2010 The Commissioner of Income Tax , Patiala -----Appellant Vs. M/s Punjab State electricity Board, Patiala. ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Jatinder Joshi, Advocate for the appellant. Mr. Pankaj Jain, advocate for the respondent. Adarsh Kumar Goel,J. 1. The revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (for short, ‘the Act’) against the order passed by the Income Tax Appellate Tribunal Chandigarh Bench ‘B’ Chandigarh dated 24.2.2005 in ITA No.439/Chandi/1997 for the assessment year 1988- 89, proposing to raise following substantial question of law:- “Whether on the facts and in the circumstances of the case, the ITAT is right in law in holding that charging of interest in this case is invalid since the Hon’ble High Court has stayed the recovery of demand whereas provisions for charging of interest are mandatory in nature? 2. The assessee is a State Electricity Board. It accepted certain deposits for raising funds but failed to deduct surcharge on the amount paid by way of interest. On that account, demand was raised under section 201 (1A) read with section 193 of the Act. On appeal, the CIT(A) upheld the plea of the assessee that the persons to whom interest was paid had already 1 ITA No.516 of 2006 deposited the tax. The recipients of the interest were nationalised and commercial banks and public undertakings and thus, there was no loss caused to the revenue. The appeal of the revenue against the said order has been dismissed by the Tribunal. 3. We have heard learned counsel for the parties and perused the record. 4. It is not disputed by learned counsel for the parties that the matter is covered by order passed by this Court dated 28.6.2010 in the case of the assessee being CWP No.16418 of 1994 and ITA Nos.104, 106 and 109 of 2002. The appeals of the revenue were dismissed against order of the Tribunal holding that interest could be charged only upto to the date the surcharge due was actually paid and not for the period after the payment. The Assessing Officer was given liberty to make necessary calculation in the light of the said finding. The writ petition of the assessee was dismissed as infructuous in view of adjudication of the issue during pendency of the writ petition. 5. In the present case, the Tribunal has referred to pendency of the writ petition wherein recovery of demand had been stayed on account of which the issue was held to be academic. Liberty was given to the revenue to proceed in the matter in the light of the decision of the writ petition. 6. In view of the fact that the writ petition has been decided, the revenue is at liberty to proceed in the matter in the light of judgment of this Court dated 28.6.2010. 7. The appeal is accordingly disposed of. (Adarsh Kumar Goel) Judge December 6, 2010 (Ajay Kumar Mittal) ‘gs’ Judge 2