TMI Blog1995 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... 972-73 amounted to Rs. 1,22,125. The intimation about adjustment of refund was given to the assessee by the Income-tax Officer on 16-12-1976. (v) 34,784 On 17-1-1977 --------------- Total 1,79,200 --------------- The assessment in respect of the assessment year 1977-78 was finalised on January 16, 1979, on an income of Rs. 2,05,090 and the tax payable was at Rs. 1,18,440. The order of the Income-tax Officer was rectified under section 154 on April 7, 1979, and the income originally assessed was increased to Rs. 2,36,306. The tax payable thereon was Rs. 1,36,468. This order was further rectified on September 10, 1979, and on rectification the total assessable income was reduced to nil. In pursuance of that order, the assessee became entitled to refund of advance tax, as well as tax deduction at source amounting to Rs. 8,005 and tax at Rs. 12,627, which was adjusted by the Income-tax Officer out of refund for the assessment year 1978-79. The Income-tax Officer refunded the tax to the petitioner-company of Rs. 1,99,832 as under : Rs. (i) 44,212 On 4-5-1979, on completion of assessment under section 141A. (ii) 30,193 On completion of assessment under section 143(3) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31, 1977. Another contention which has been raised is that in respect of advance tax of Rs. 1,04,795 the assessee is entitled to interest from April 1, 1977, to January 15, 1979. In respect of the contention that the assessee is entitled for interest on the advance tax even after the due date, but within the financial year, it is submitted that the provisions of section 214 provide for payment of simple interest at 15 per cent. per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under sections 207 to 213, exceeds the amount of the assessed tax from the first day of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year during which it is payable by reason of the provisions of section 213, interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of regular assessment. The dispute is with regard to the payment of interest in respect of the instalment of advance tax which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 being totally unconnected with deprivation of interest, where penalty is incurred, the interest on excess advance tax must be paid if the two abovesaid conditions are satisfied. The Madhya Pradesh High Court in CIT v. Jagannath, Narayan Kutumbik Trust [1983] 144 ITR 526 observed that section 214 is a self-contained provision and the section cannot be interpreted with reference to another provision of the Act, i.e, section 218, for limiting or enlarging its scope. Section 218 deals with a totally different situation. An assessee is entitled to interest on fulfilment of the conditions laid down in section 214, even though he may be a defaulter under section 218 and is liable to penalty under section 211. It was held that the interest under section 2 14 is payable to the assessee on the excess amount paid during the financial year on dates subsequent to the dates stipulated under section 211 of the Income-tax Act for payment of such instalments. The Bombay High Court in Pfizer Limited v. K. N. Anantharama Aiyar, CIT [1987] 163 ITR 461, while interpreting the provisions of section 215 of the Act observed that there is nothing in section 215, which requires payments of instalment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , they will be given credit for under section 219. Advance tax paid during the relevant year but not on the specified dates does not cease to have the character of advance tax and continues to be advance tax and is to be credited as advance tax paid against the tax payable at the time of regular assessment in accordance with section 219. The assessee was held entitled to interest under section 214 in respect of the advance tax paid during the financial year. The Madras High Court in CIT v. T. T. Investments and Trades Pvt. Ltd. [1984] 148 ITR 347 has also taken the view that though the assessee may be proceeded against for non-payment of advance tax on the due date, so long as the payment is accepted it can only be towards advance tax. Any payment made before the end of the accounting year for which the assessment is made should be taken as advance tax. The assessee was held entitled to interest under section 214 on the payment in question. The Calcutta High Court in CIT v. Ajoy Paper Mills Ltd. [1990] 181 ITR 454 has observed that if credit is given by the Department for the belated payments made during the financial year in calculating the tax due on regular assessment, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome subject to advance tax. Tax in advance is payable in accordance with the provisions of sections 208 to 219 in the case of income other than capital gains and income referred to in sub-clause (ix) of clause (24) of section 2. Section 208 stipulates the condition for the liability to pay advance tax. In the case of a company or a local authority such assessee becomes liable to pay advance tax provided the total income exceeds two thousand five hundred rupees. Section 209 provides for the manner of computation of advance tax. Section 209A provides for computation and payment of advance tax by the assessee. Section 210 empowers an Income-tax Officer to make an order requiring to pay advance tax, if an assessee has been previously assessed by way of regular assessment. Section 212 provides for furnishing of an estimate by an assessee. Section 211 provides for payment of advance tax in three equal instalments on or before the stipulated dates. Section 214 fastens liability on the Central Government to pay simple interest at twelve per cent. per annum on the amount by which the aggregate sum of any instalment of advance tax paid during any financial year in which they are payable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed on this count. The other contention which has been raised is in respect of the amount of Rs. 1,04,795 on which the assessee is claiming interest from April 1, 1977, to January 15, 1979. This amount of Rs. 1,04,795 has been arrived at after reducing the figure of Rs. 44,212 and Rs. 30,193 from the total tax of Rs. 1,79,200. This refund was allowed on passing an order under section 154, to set off loss, unabsorbed loss and depreciation consequent to the appellate order. It includes even the amount which is not paid as advance tax but was adjusted on account of the appeal effect for the assessment year 1972-73 for which the refund became due to the assessee and was adjusted against the current year liability. This court has taken a view in the case of Associated Stone Industries v. CIT [1996] 217 ITR 246, D. B. Income-tax Reference No. 69 of 1986, decided on March 14, 1995, that interest on refund in the rectification proceeding will not be permissible. The adjustment of refund could not be considered to be an advance tax for which separate provision exists for interest, interest under section 214 is not allowable. It was not on account of any omission on the part of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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