TMI Blog2015 (2) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... 14, however, we are considering the case with regard to an application having been moved under section 154. If we peruse the phraseology of section 154, then it is clear that only a mistake apparent on the face of record can be said to be rectifiable. A debatable issue cannot be said to be rectifiable. Thus the assessee was not entitled to interest under section 214 as the issue was debatable. - Decided in favour of the Revenue. - D.B. INCOME TAX REFERENCE NO.67/1995 - - - Dated:- 26-3-2014 - MR. AJAY RASTOGI AND MR. J.K. RANKA, JJ. For the Appellant : Mr. Anuroop Singhi, Advocate For the Respondent : Mr. Anant Kasliwal, Advocate JUDGEMENT J. K. Ranka J.- 1. This Income-tax reference is directed against the order dated January 3, 1994, passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (in short, the ITAT ), for the assessment year 1975-76. The Income-tax Appellate Tribunal referred the following questions of law under section 256(1) of the Income-tax Act, 1961 (for short the Income- tax Act ) : (1) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in directing the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 154 is rejected. 6. Dissatisfied with the aforesaid order, an appeal came to be preferred before the Commissioner of Income-tax (Appeals), who upheld the findings of the Assessing Officer and in addition held that the matter is not covered under section 154 as there are divergent views of different High Courts and the issue was debatable. He, accordingly, dismissed the appeal. 7. The assessee preferred an appeal before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal, after considering the arguments, allowed the claim of the respondent-assessee, in view of the fact that majority of the High Courts have held that where the advance tax though paid after the prescribed date but within the financial year, then interest is payable under section 214. In so far as the issue being debatable, the Income-tax Appellate Tribunal observed that there was no application of mind by the Assessing Officer at the time of passing of assessment order and, thus, application under section 154 was maintainable and, accordingly, allowed the claim of the respondent-assessee. The Income-tax Appellate Tribunal further relied upon its order in the case of Nathmal Gadia v. ITO repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, rendered in the case of CIT v. Moti Sagar Kapoor [1993] 200 ITR 743 (Delhi). He, accordingly, submitted that the reference needs to be answered in favour of the Revenue. 9. Learned counsel for the assessee submitted that admittedly the instalment of advance tax paid on December 26, 1974, amounting to ₹ 15,16,166, has been held to be advance tax even by the Assessing Officer and once the credit of the said amount having been allowed as advance tax, then the assessee was certainly entitled to interest under section 214 of the Income- tax Act. He further contended that the issue was not at all debatable as even at the time of disposal of the application under section 154 on January 18, 1989, majority of the High Courts had held that interest is to be allowed, even if the advance tax was deposited beyond the prescribed time but within the financial year. He further contended that the Income-tax Appellate Tribunal, after appreciating the judgments of various High Courts, has correctly allowed the appeal and no interference is required to be made. He further contended that refusal to grant interest under section 214 by specific order or otherwise is not appealable under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have gone through the judgments cited by learned counsel for the assessee. However, we also agree with the first contention of the learned counsel for the assessee on the basis of the judgments relied upon by him and which have by and large held that any amount paid after the dates prescribed under section 211 but paid within the financial year would certainly be treated as advance tax. The Gujarat High Court in the case of Chandrakant Damodardas v. ITO (supra) has held that the Legislature intended to provide that irrespective of the dates on which the instalments of the advance tax are paid, interest will be payable on the excess advance tax if two conditions are satisfied (i) the entire amount of advance tax is paid up ; (ii) it is paid up before the end of the financial year. There is no further condition that the installments of the advance tax must have been paid on or before the due dates mentioned in section 211. The Kerala High Court in the case of Santha S. Shenoy v. Union of India (supra) held that the very scheme of the Income-tax Act shows that the obligation of the assessee is to pay tax in advance during the previous year and if he fails to make an estimate in accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... She noy v. Union of India [1982] 135 ITR 39 (Ker) and CIT v. Jagannath Narayan Kutumbik Trust [1983] 144 ITR 526 (MP). The Andhra Pradesh High Court in the case of Kangundi Indus trial Works P. Ltd. v. ITO [1980] 121 ITR 339 (AP) and the Kerala High Court in A. Sethumadhavan v. CIT [1980] 122 ITR 587 (Ker) have held that the assessee is not entitled to interest on advance pay ment if such payment is not made on the due dates. The point, therefore, could be said to be an arguable point which requires elaborate discussion. In CIT v. Jagannath Narayan Kutumbik Trust [1983] 144 ITR 526 (MP) while deciding the issue that where the advance tax is paid before the end of the financial year, the assessee is entitled to interest on the excess over the assessed tax, it was held by the Madhya Pradesh High Court that the issue cannot be considered non-controversial or free from debate and, therefore, could not be rectified under section 154. In CIT v. Parmanand Bhai Patel and Smt. Jyotsnadevi Patel [1983] 144 ITR 871 (MP) the Madhya Pradesh High Court have again considered this one as a debatable issue and not rectifiable under section 154. The law on this point is settled by the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that withdrawal of such interest by taking recourse to the proceedings under section 154 is not justified. 18. The Madhya Pradesh High Court, in the case of CIT v. Parmanand Bhai Patel and Smt. Jyotsnadevi Patel [1983] 144 ITR 871 (MP), also considered the issue and held that grant of interest under section 214 is still a debatable question and different views have been expressed by different High Courts. It further held that the view has been taken by the Andhra Pradesh High Court and the Kerala High Court and in view of the sharp divergence of opinion, it is clear that there could be no mistake on record on such a question and, therefore, held that the order of rectification would be invalid and without jurisdiction. 19. The Delhi High Court, in the case of J. M. A. Industries Ltd. v. CIT [1993] 200 ITR 210 (Delhi) has held so and also the Allahabad High Court, in the case of CIT v. Modi Industries [1999] 235 ITR 464 (All). 20. Accordingly, we would choose to follow the view expressed by this court and, accordingly, the reference is answered in favour of the Revenue and against the respondent-assessee and it is held that the assessee was not entitled to interest unde ..... 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