TMI Blog1984 (12) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... in the sum of Rs. 51,98,705. It paid the second instalment on September 15, 1971 in the, sum of Rs. 88,13,147. Its case is that it paid the third instalment of Rs. 88,13,148 on December 16, 1971. It is the respondents case, and I proceed upon this basis, that this payment was made on December 22, 1971. The petitioner also paid surcharge in the sum of Rs. 5,70,625. The petitioner's assessment for the assessment year was completed on December 31, 1974. There were two rectification orders. A sum of Rs. 2,48,32,212 was finally assessed as income-tax due by the petitioner. On October 13, 1978, the petitioner was served with a notice to show cause why interest under section 215 should not be recovered from it. On November 20, 1978, the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81. Mr. Dalvi, learned counsel for the petitioner, submitted, first, that when, in making an assessment, an Income-tax Officer treats an amount paid during financial year as a payment of advance tax, the payment has to be considered as a payment of advance tax for the purposes of charging or paying interest under sections 215 and 214 of the Act. He showed that in the assessment order dated December 31, 1974, credit has been given to the petitioner "for advance payment of tax Rs. 2,33,95,625 ", i.e., that the payment of Rs. 88,13,148 on December 22, 1971, had been treated as a payment of advance tax. In CIT v. Traub (India) P. Ltd. [1979] 118 ITR 525 (Bom), this court was considering an application under section 256(2) of the Act for a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every amount paid by an assessee during financial year, though it be paid after the due date of payment of an instalment of advance tax, is a payment of advance tax. Mr. Dalvi cited the judgment of the Gujarat High Court in Chandrakant Damodardas v. ITO [1980] 123 ITR 748. It was observed there that what was required was that before the end of a financial year, advance tax should be paid. So far as the failure to pay an instalment of advance tax was concerned, the liability to pay a penalty might arise. The concept of section 214 of the Act (which has been held by a Full Bench of this court, in CIT v. Carona Sahu Co. Ltd. [1984] 146 ITR 452 (Bom) [FB] to be the counterpart of section 215) was the concept of the aggregate amount of the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the financial year concerned, would be given credit to under section 219. The scheme of the Act showed that the obligation of the assessee was to pay tax in advance during the financial year and if he failed to make an estimate in accordance with his income, he invited the liability to pay interest under section 217. Similarly, if he paid more, he had necessarily the right to get interest on the excess amount paid and that interest was payable from the 1st of April next succeeding. This was naturally so because the payment had to be made during the previous financial year. There was no rhyme or reason in limiting the payment of interest to excess advance tax paid before the specified dates and not within the financial year. The court app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y-five per cent", the words "eighty-three and one-third per cent." had been substituted. (2) Where before the date of completion of a regular assessment, tax is paid by the assessee under section 140A or otherwise, (i) interest shall be calculated in accordance with the foregoing provision up to the date on which the tax is so paid; and (ii) thereafter, interest shall be calculated at the rate aforesaid on the amount by which the tax as so paid (in so far as it relates to income subject to advance tax) falls short of the assessed tax." An analysis of the provisions of section 215, sub-sections (1) and (2) is called for. Interest under section 215 is payable by an assessee where, in any financial year, he has paid advance tax (i.e., ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submission that sub-section (2) of section 215 does not apply here but applies, because of the phrase "under section 140A or otherwise", only to cases of self-assessment. The words "or otherwise" are of the widest amplitude and cover all payments of tax before the date of completion of the regular assessment. I respectfully agree with the observations of the Gujarat and Kerala High Courts. There is nothing in section 215 which requires the payments of instalments of advance tax to be made on or before the due dates thereof before the provisions of that section can apply. I cannot, with great respect, agree with the reasoning of the Andhra Pradesh High Court that, because the assessee has rendered himself liable to penalty for late payme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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