TMI Blog1980 (1) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... rect figure of refund up to the date Of regular assessment ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that interest under section 214 was to be allowed on the amount of refund attributable to the relief under section 80J allowed in the revision order under section 154 of the Act? The assessee is engaged in running a textile mill. The assessment for the assessment year 1968-69 was made on January 29, 1970, in which the total income was determined to be Rs. 7,89,480. The income-tax due was arrived at as Rs. 4,18,558.80. The assessee had paid advance tax of Rs. 4,62,387 so that the assessee was entitled to refund of Rs. 43,828.20. The assessee was entitled to interest under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There was, therefore, a refund of Rs. 67,330. The ITO calculated the interest due under s. 214 of the Act to be Rs. 18,286.10. He deducted the interest already granted under the original assessment order, namely, Rs. 7,119.50. The result was that he granted a sum of Rs. 11,086.54 as interest due to the assessee as a result of the rectification of the assessment. The Commissioner took up suo motu revision of the assessment under s. 263 of the Act. In his view, the ITO had already allowed the interest due under s. 214 of the Act and that no further interest should have been awarded as was done by the ITO in his order dated September 22, 1971. After hearing the assessee's objections to the proposed revision, the Commissioner directed the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance tax. These provisions have been brought under the heading " C-Advance payment of tax". Section 214, in so far as it is material, runs as follows: " 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 the 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 financial year during which it is payable by reason of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a result of an order under s. 154 or s. 155 or s. 250 or s. 254 or s. 260 or s. 262 or s. 264, the amount on which interest was payable under s. 215 was reduced, the interest should be reduced accordingly and the excess interest paid, if any, was to be refunded by the assessee. Thus the scheme of the Act can be described as follows: As the assessee is required to pay advance tax and as his funds are locked up with the Government, if the assessee had paid advance tax in excess of the tax due under regular assessment, then on the excess so paid, the assessee would be entitled to interest. Similarly, where the payment of advance tax by the assessee was less than seventy-five per cent. of the assessed tax, then he has to pay interest to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to accept this submission. We have already seen that there is a specific provision made under s. 215(3) of the Act in order to cover cases of interest payable by the assessee where the payment of tax was less than seventy-five per cent. as result of the rectification or other orders passed in this case. Though such an express provision is lacking with reference to the interest payable by the Government to the assessee, the assessee would, in the scheme as envisaged above, be entitled to the interest. The rectification of the assessment has only the effect of making the assessment order passed on January 29, 1970, as the regular assessment order or correct assessment order. In other words, the " regular assessment " is made regular in trut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the tax was Paid. Section 18A(8) provided for payment of interest in a case where, on making a regular assessment, the ITO found that no payment of tax had been made in accordance with the provisions of s. 18A. It was envisaged that interest calculated in the manner laid down in sub-s. (6) of s. 18A should be added to the tax as determined on the basis of the regular assessment. The contention urged on behalf of the assessee was that s. 18A(6) would cover only those case where the assessee had paid any advance tax and, therefore, that provision would not be attracted in a case where the assessee had not paid any advance tax. Rejecting this contention, the Supreme Court held that the words " from the first day of January in the finan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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