TMI Blog1982 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregate sum of instalments of advance tax paid during the financial year for which they were payable under ss. 207 to 213 exceeded the amount of the tax determined on regular assessment. The instalments of advance tax were not paid on due dates in accordance with s. 211 of the Act but the entire sum was paid before the end of the financial year. The ITO while passing the order did not credit any interest to the assessee under s. 214 of the Act. The assessee made an application under s. 154 of the Act for rectification of a mistake claiming that interest under s. 214 on the excess amount paid as advance tax should be paid to it. The ITO rejected the claim on the ground that the payment was made after the due dates of the instalments prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to be controversial and hence is covered u/s. 154 of the Income-tax Act, 1961 ?" Question No. 1 : Section 214(1) of the I.T. Act, which is relevant for answering this question, is as follows : " 214. (1) The Central Government shall pay simple interest at twelve 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 tax determined on regular assessment, from the 1st 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever the amount of advance tax falls short by a certain percentage of the assessed tax. It is, therefore, just and reasonable to apply the same yardstick against the Revenue. There are, however, two decisions taking a contrary view. The Andhra Pradesh High-Court in Kangundi-Industrial Works (P.) Ltd. v. ITO [1980] 121 ITR 339, and the Kerala High Court in A. Sethumadhavan v. CIT [1980] 122 ITR 587, have held that if the assessee has not paid instalments of advance tax on the dates as prescribed under s. 211 of the Act he is not entitled to claim interest on the excess amount paid by him under s. 214 even though the entire amount of advance tax has been paid before the end of the financial year. This line of reasoning has been adopted by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t because according to us as a result of our answer to this question it would not have been necessary to answer question No. 1. Learned counsel for the assessee, however insisted that since both the questions have been referred for our advice it will be proper if both are answered, though, in view of our answer to question No. 2, the assessee will not get any relief even though out answer to question No. 1 is in its favour. The powers of rectification under s. 154 of the I.T. Act have now been well defined by their Lordships of the Supreme Court in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50, and it has been held that (headnote): "A mistake apparent on the record must be an obvious and patent mistake and not something which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was rectifiable under s. 154 of the Act by; the ITO. There is an obvious fallacy in this reasoning. Whether the issue is debatable or not will depend on its intrinsic character and not on what a particular High Court holds at a particular time. The Appellate Tribunal felt that the decision of the Gujarat High Court in CIT. v. Kohinoor Flour Mills [1975] 99 ITR 54 , clinched the issue with respect to the interpretation of s. 214 of the Act and it was bound by that decision. We have perused the decision and we do not think that the Gujarat High Court was specifically dealing with s. 214 as such. Therefore, the premise on which this argument was advanced by the learned counsel for the assessee does not appear to be justified. But even assu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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