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TMI Blog1984 (1) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant, the factual position is as follows: Rs. Total income as per AO 10,05,629 --------- Tax payable on regular assessment 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h it is certainly other tax paid before the close of the financial year. Therefore, the appellant's liability to pay interest under section 215 has to be determined with reference to the advance tax paid, i.e. Rs. 2,26,660 and this amount falls short of 75 per cent of the tax levied on regular assessment, the assessee was liable to pay interest under section 215. 3.1 Consequent to the submissions of the assessee in the matter of quantification of the interest he observed that even last instalment paid on 11-1-1979 has to be regarded as tax paid and, hence, interest has to be quantified by taking into account the assessee's whole amount of tax paid during the financial year 1978-79, i.e., Rs. 4,89,990. Therefore, according to him, interest under section 215 should be computed on the difference between the tax payable on regular assessment, i.e., Rs. 6,33,347 less total tax paid in the financial year, i.e., Rs. 4,89,990, leaving a balance of Rs. 1,43,557 on which interest should have been calculated. 3.2 Having observed above, he held that actually levy of interest under section 215 is not appealable as such. Secondly, the appeal is directed against the ITO's refusal to accede to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been mentioned in place of the words 'in any financial year'. The ITO rightly followed the scheme of the Act while calculating the tax. Reliance was placed on the decision of the Allahabad High Court in the case of Omega Sports & Radio Works v. CIT [1982] 134 ITR 28 regarding binding of the High Court judgment and also on decision in 15 STC 338 regarding appropriation of payment. In fact, even first instalment was also late by one day. Reliance was again placed on the decisions of the Gujarat High Court in the cases of CIT v. Kohinoor Flour Mills [1975] 99 ITR 54 and Chandrakant Damodardas v. ITO [1980] 123 ITR 748. Attention was also brought to page 753, wherein, according to the learned counsel, concept of aggregate of taxes paid in financial year was clear. The Legislature had not used the phrase 'any financial year' without any intention. It was further gracefully submitted that controversy is there as could be seen in the decision of the Kerala High Court in Santha S. Shenoy v. Union of India [1982] 135 ITR 39 at page 45, second para. But then it was claimed that that order was passed without opportunity having been given to the assessee, interest was charged subsequently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which payments were made could be treated as advance tax paid for the purpose of section 215. And if it is held that the aggregate amount of any instalment paid during the financial year is to be treated as advance tax, then not treating any instalment as advance tax payment because of the late payment after final instalment became due would be a mistake apparent from record. 6.1 As is rightly brought out before us that the ITO himself has treated the aggregate amount of advance tax paid in three instalments as advance tax, we are unable to know why different stand is taken for the purpose of calculating tax under section 215. The ITO while rejecting the application of the assessee under section 154 has merely stated that last instalment paid on 11-1-1979 was beyond the due date, i.e., 15-12-1978, and, therefore, the said payment is not considered as advance tax while actually calculating the interest. However, the ITO still maintained that credit for advance tax paid beyond the due date had already been given. His reply to the assessee dated 28-8-1981 is reproduced below : "With reference to the above, I have to state that interest under section 215 of the Income-tax Act is cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and this supports the view that payments made before 31st March of the financial year have to be considered as advance tax payments ignoring the dates on which the payments were made. This view would be fortified by the fact that no cognizance is taken of different types of previous years followed by different assessees. For example, in case of the assessees following June ending, last date for filing the estimate or revised estimate under section 212 of the Act would be 15th December, while the assessees following financial year as the previous year the last date for filing the estimate would be 15th March. Therefore, the intention of the Legislature is not to discriminate between different types of assessees following different previous years so long as the payments are made before the commencement of the assessment year. Besides, charging of interest under section 215 is only compensatory to recoup loss of interest on amount withheld by the assessee. This fact is evident from the fact that period for which interest is to be calculated is to run from 1st day of the assessment year (this is because payment made up to 31st March is to be treated as advance tax) up to the date of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition approach the department for making ad hoc payments towards the demands to be raised in future and it is the practice of the department to accept such payments as deposits on which usually the department does not grant interest if part of the some results in refund later on. 7. Coming to the order of the Commissioner (Appeals), the ITO made a mistake in calculation of the amount of tax under section 215 is also confirmed by him in para 5 of his order. He states that for the purpose of computation of interest, all taxes paid before the end of the financial year have to be treated as advance tax paid. According to him, position as on 1st April has to be seen. In so doing, interest should have been levied with reference to the shortfall of Rs. 1,43,557 (assessed tax less tax paid during financial year). Therefore, our view that the ITO committed mistake in calculating the amount of interest and, therefore, he should not have rejected the application filed by the assessee under section 154 is even strengthened by the finding of the Commissioner (Appeals). 7.1 Again the Commissioner (Appeals) was also of the opinion that if instalment is paid after due date of last instalment, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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