1. The petitioner is seeking a writ of mandamus for a direction to respondent No. 1 to implement the order date September 17, 1975, passed by the Commissioner of Income-tax, Bombay, and to award appropriate interest to the petitioner under s. 214 of the I.T. Act, 1961 (hereinafter referred to as 'the Act').
2. Only few facts are required to be stated to appreciate the grievance of the petitioner. The petitioner was liable for payment of advance tax for the first time in the assessment year 1972-73. Accordingly, the petitioner filed the estimate of income on December 15, 1971, and the estimated amount was Rs. 70,560. The tax due on this amount was Rs. 34,650, and the same was paid by the petitioner on December 23, 1971. The Addl. 4th ITO, B-III Ward, Bombay, completed the assessment and passed the assessment order on February 11, 1975, and the total income of the petitioner was assessed at Rs. 46,000. The tax due on that amount was Rs. 16,790, and, therefore, the ITO directed that the balance amount of tax paid on December 21, 1971, should be refunded.
3. The petitioner addressed a letter to the ITO on March 21 1975, seeking rectification of the assessment order on the ground that the petitioner was not only entitled to the refund but also to an interest as contemplated by the provisions of s. 214 of the Act. As the petitioner did not receive any reply from the ITO, a letter dated May 14, 1975, was addressed to the Commissioner of Income-tax, Bombay City. The Commissioner, by his order dated September 17, 1975, passed in exercise of the powers under s. 264 of the Act, directed the ITO to allow appropriate interest under s. 214 of the Act. The grievance of the petitioner is that in spite of this order the ITO has failed to grant appropriate interest to the petitioner. The petitioner addressed letters on August 2, 1976, and November 29, 1976, to the ITO and the Commissioner, respectively, but without any result, and, therefore, the present proceedings under art. 226 of the Constitution of India are filed in this court on October 17, 1977.
4. From the facts set out hereinabove, it is clear that the ITO has failed to discharge his duty and grant appropriate amount of interest under s. 214 of the Act in compliance with the order passed by the Commissioner on September 17, 1975. Shri Pradhan, the learned counsel appearing on behalf of the respondents, cannot give any effective answer as to why such an order was not passed. The apprehension of the petitioner is that in view of the instructions issued on October 10, 1975, by the Central Govt. the ITO is not passing the order. It is obvious that the circulars issued by the Government have no force of law, and in any event the circular which came subsequent to the order of the Commissioner has no application to the facts of the present case. The ITO is bound to pass appropriate orders awarding interest to the petitioner under s. 214 of the Act.
5. Accordingly, respondents Nos. 1 and 2 are directed to pass appropriate orders within a period of four weeks from today. The respondents shall pay the costs of the petition.