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Interpretation of section 214 of the Income-tax Act, 1961 regarding the payment of interest on advance tax. Analysis: The High Court of Delhi was presented with a question referred by the Income-tax Appellate Tribunal regarding the correctness of charging interest under section 214 on a delayed payment of advance tax. The assessee, a private limited company, had filed its return for the assessment year 1975-76 and claimed interest under section 214 as the advance tax paid was in excess of the tax payable. The Income-tax Officer disallowed this claim as the last instalment of advance tax was paid late. The Appellate Assistant Commissioner allowed the claim, and the Tribunal upheld this decision, emphasizing the plain reading of section 214. The Revenue contended that any payment made beyond the stipulated date does not qualify for interest under section 214. The court analyzed the relevant provisions of the Income-tax Act, specifically sections 207 to 213, which deal with advance payment of tax. It was noted that these sections encompass various aspects of advance tax payment, including the computation of tax payable, due dates for instalments, and deferment of payment. The court referred to a previous judgment by the Full Bench of the Andhra Pradesh High Court, which clarified the interpretation of sections 207 to 213 in relation to section 214. The court agreed with this interpretation, emphasizing that the reference in section 214 to sections 207 to 213 includes all provisions related to advance tax payment, not just section 211. Therefore, the court held that interest is payable on the excess amount of advance tax paid during the financial year, even if the instalments were not strictly paid as per section 211. In conclusion, the court answered the question referred in the affirmative, favoring the assessee and ruling against the Revenue. The judgment clarified the interpretation of section 214 and affirmed that interest under this provision is payable on advance tax paid in excess of the tax liability, even if the instalments were not paid strictly in accordance with section 211.
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