1981 (8) TMI 115 - AT - Income Tax

Summary

Issues:
1. Jurisdiction of the AAC regarding charging of interest u/s. 139(8)
2. Treatment of taxes paid beyond due dates for advance tax credit

Jurisdiction of the AAC regarding charging of interest u/s. 139(8):
The Revenue appealed against the AAC's order, arguing that the AAC exceeded jurisdiction by deciding on the issue of charging interest u/s. 139(8). The AAC's order directed the ITO to credit advance taxes paid within the financial year before calculating interest u/s. 139(8). The Revenue contended that the assessee did not challenge the liability to interest but only sought quantification based on all advance tax payments made during the relevant financial year. The Tribunal dismissed this ground of appeal, stating it did not arise from the AAC's order, as the assessee did not dispute the charging or liability to interest u/s. 139(8).

Treatment of taxes paid beyond due dates for advance tax credit:
The Revenue's alternative plea was that taxes paid beyond due dates specified in s. 211 should not be considered advance taxes for credit purposes. Citing decisions from various High Courts, the Revenue argued that belated payment of advance tax forfeits the right to claim interest u/s. 214. The assessee, supported by case law, contended that all taxes paid during the financial year should be credited. The Tribunal noted that the cases referred to by both sides related to interest payable by the Government u/s. 214, not by the assessee u/s. 139(8). The Tribunal held that advance tax paid within specified dates should only be considered for quantifying interest payable by the assessee u/s. 139(8). As the AAC's order lacked reasoning for directing the ITO to credit taxes paid after due dates, the Tribunal allowed the Revenue's appeal, reversing the AAC's order and restoring that of the ITO.

In conclusion, the Tribunal allowed the Revenue's appeal, emphasizing that advance tax payments made within specified dates should be considered for calculating interest payable by the assessee u/s. 139(8). The Tribunal found no justification for the AAC's direction to credit taxes paid after due dates and reversed the AAC's order, restoring that of the ITO.