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TMI Blog1986 (7) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961 ('the Act') in respect of tax deducted at source aggregating to Rs. 4,476 of which Rs. 4,130 became refundable on the completion of the assessment. According to the learned departmental representative, section 214 does not provide for the payment of interest in respect of tax deducted at source. It deals with the payment of interest by the Government in case advance tax paid is found to be more than the assessed tax. In the present case, there was no advance tax paid and so the question of the advance tax exceeding assessed tax by any amount did not arise and as such the question of payment of interest under section 214 on such excess was irrelevant. 2. On behalf of the deceased assessee, the legal representative of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 346 became payable. Tax deducted at source was, however, Rs. 4,476 and, therefore, at the time of assessment, it was ascertained that the amount of Rs. 4,130 was refundable to the assessee on account of tax deducted at source. The assessment in question was finalised on22-12-1980. It was with reference to the above refundable amount, namely, Rs. 4,130 that the dispute with regard to the payment of interest thereon arose. The ITO had granted no interest to the assessee on the aforesaid amount. The AAC, however, felt that interest was payable to the assessee in terms of section 214 for the period1-4-1978to31-8-1980and, accordingly, he directed the ITO to allow interest to the assessee for the aforesaid duration. 4. The period 1-4-1978 to 31- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gregate sum paid in the form of various instalments of advance tax. The words 'advance tax' have been defined in section 207. According to sub-section (1) thereof, "Tax shall be payable in advance in accordance with the provisions of sections 208 to 219 in the case of income other than--- (a) income chargeable under the head 'Capital gains'; and (b) income referred to in sub-clause (ix) of clause (24) of section 2." Sub-section (2) of the said section provides that--- "Such income is hereinafter in this Chapter referred to as 'income subject to advance tax', and such tax is hereinafter in this Chapter referred to as 'advance tax'." [Emphasis supplied] Section 209 provides for the computation of advance tax. According to clause (a) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with section 195 of the Act, he is visited with certain penal consequences as provided for in section 201, namely, the imposition of penalty and the charging of interest. No action for non-deduction of tax at source is indicated against the assessee, nor any interest is payable by the assessee, if tax is not deducted from his salary, etc., and is not deposited with the Government. Sections 208 to 219 of the Act deal with advance tax and require the payment of advance tax by the assessee himself and in case of the assessee's failure to pay the tax as required under sub-Chapter 'C' of Chapter XVII dealing with advance payment of tax, it is the assessee, who has to bear the brunt of penal consequences, in contrast to the position obtaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in sub-Chapter 'B' analogous to the provisions of section 214 obtaining in sub-Chapter 'C'. It is not stipulated in sub-Chapter 'B' that any interest will be paid to the assessee in case the tax deducted at source is found on regular assessment to be in excess of assessed tax. Section 214, in contrast, specifically states that, if aggregate of advance tax paid in instalments as provided in section 211, is more than the 'assessed tax' interest on such excess will be paid. On account of separate provisions governing the tax deduction at source and the payment of advance tax, it is difficult to see as to how section 214 can be made applicable to the situation where there is excess of tax deduction at source over the assessed tax which is cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment. Rather, the period starts after the expiry of three months from the end of the month in which the total income is determined. The assessee's request, therefore, that interest should be paid to him on the excess of tax deduction at source over the assessed tax from first day of April next following the financial year in which the tax deduction at source was done, cannot be accepted. Payment of interest under the statute has to be authorised by a specific provision of the Act and it would not be correct to direct the payment of interest on the general hypothesis that if the Government has used the assessee's money it should pay interest for the period for which it has used the money of the assessee. It may be the ideally correct pos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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