HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Raja Ram Kumar Bhargava (Dead) by Legal Representatives v. Union of India
Civil Appeal No. 4034 of 1983
[1988] 2 SCR 352 ·
Income-tax Act, 1922: sections 66(5), 66(7) · Income-tax Act, 1961: sections 297(2)(a), 297(2)(i) · Excess Profits Tax Act, 1940: section 21 · Code of Civil Procedure, 1908: section 9 · Constitution of India: article 226
Holding and result. The income-tax interest claim failed because the pre-1961 assessment was a completed assessment governed by section 297(2)(i); the appeal was nevertheless allowed in part for Rs.12,282.11 interest on the excess-profits-tax refund under the separately incorporated section 66(7) regime, without deciding civil-suit maintainability.
Sources & disclosures includedDownload original judgment / order
Two-judge bench; judgment delivered by M. N. Venkatachaliah, J. · S. Natarajan, J. · M. N. Venkatachaliah, J.
Assessment years: 1947-48
01 · Facts of the case
For AY 1947-48, Raja Ram Kumar Bhargava, assessed as karta of an HUF, paid Rs.2,57,383.87 after assessment and appellate orders. References later produced refunds of Rs.2,01,146.62 income tax and Rs.19,126.16 excess profits tax. After repeal of the 1922 Act, the Department rejected interest. The assessee sued for Rs.1,17,358.87 income-tax interest and Rs.12,282.11 excess-profits-tax interest. The Single Judge dismissed the suit; the Division Bench sustained dismissal under the 1961 Act transition.
Source: Primary judgment: assessment, refunds and suit history
02 · Discussion by the Hon’ble Court
Following Panchanatham Chettiar, the Court held that an assessment is “completed” for section 297(2)(i) when the Income-tax Officer passed the pre-1961 assessment order; appellate finality was unnecessary. The income-tax interest claim therefore failed. The excess-profits-tax claim differed: section 21 of the 1940 Act incorporated section 66 of the 1922 Act, and section 66(7) mandated refund interest while leaving discretion over its rate. The Court outlined implied exclusion of civil jurisdiction but did not finally decide maintainability.
Source: Primary judgment: transition, incorporated right and jurisdiction discussion
03 · Judicial decision
The Court upheld rejection of Rs.1,17,358.87 income-tax interest. To end decades-old litigation, it awarded Rs.12,282.11 excess-profits-tax interest without deciding civil-suit jurisdiction.
04 · Outcome / in whose favour
Appeal allowed in part. The dismissal remained undisturbed for the income-tax interest claim. The decree was reversed only for Rs.12,282.11, with pendente lite and further interest at six per cent per annum from institution until realisation; appellants received costs proportionate to success.
05 · AKHB REVIEW POINT
AKHB analysis: separate each refund by its charging and machinery statute before applying a repeal transition. A pre-commencement Income-tax Officer order can satisfy the historical “completed assessment” rule even if appellate or reference proceedings later alter quantum. Do not generalise the excess-profits-tax relief: it depended on statutory incorporation, special case-management relief, and provisions no longer forming ordinary current-law refund practice.
Source & verification
Download original judgment / order · Open cited source rendition
Complete eleven-page SCR report read in page-preserving text and every page image inspected (SCR 352-362).
- Exact catalogue SHA-256 and eleven-page count verified; all pages were read and visually inspected.
- Only the Rs.12,282.11 excess-profits-tax interest claim succeeded; the Court left civil-suit maintainability undecided.
Statutory scope
Historical provisions only: 1922 Act sections 66(5)/(7), 1961 Act section 297(2)(a)/(i), and Excess Profits Tax Act section 21. The six-per-cent award was case-specific relief, not current refund-interest law.
Later treatment
Source checked 2026-10-12. No comprehensive later-treatment or present-law clearance is represented. The judgment applies the repeal transition from the 1922 Act and the historical Excess Profits Tax Act, 1940.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from the identified primary report and has not been represented as independently human-reviewed.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, governing statutory version and subsequent judicial treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court's holding, and no current-law clearance is claimed.