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Issues Involved:
1. Whether the term "regular assessment" in section 214(1) of the Income-tax Act, 1961, refers to the first assessment or the revised assessment. 2. Whether interest is payable under section 214(1) on the excess amount of advance tax paid by the assessee up to the date of the revised assessment. 3. The scope and application of sections 214(1), 214(1A), 214(2), 215, and 244 of the Income-tax Act, 1961, in the context of payment of interest on excess advance tax. Summary: Issue 1: Interpretation of "Regular Assessment" The primary issue was the interpretation of the term "regular assessment" under section 214(1) of the Income-tax Act, 1961. The court examined whether this term refers to the initial assessment or includes revised assessments following appellate or revisional decisions. The court noted that the term "regular assessment" is defined in section 2(40) of the Act as an assessment made under section 143 or section 144, which includes assessments made pursuant to appellate orders. Issue 2: Payment of Interest on Excess Advance Tax The court addressed whether interest is payable on the excess amount of advance tax paid by the assessee up to the date of the revised assessment. The court concluded that interest should be paid up to the date of the revised assessment, as it is the operative assessment determining the final tax liability. The court emphasized that denying interest for the period beyond the first assessment would be illogical and contrary to the scheme of the Act, which aims to balance the obligations of both the assessee and the Central Government. Issue 3: Scope and Application of Relevant Sections The court analyzed the legislative history and the scheme of sections 214, 215, and 244. It highlighted that section 214(1) deals with the payment of interest on excess advance tax, while section 244 deals with interest on refunds due to appellate orders. The court clarified that section 214(1A) and section 214(2) do not alter the obligation to pay interest up to the date of the revised assessment. The court also distinguished the scheme of section 215, which pertains to the payment of interest by the assessee on deficit payments, from that of section 214. Conclusion: The court concluded that section 214(1) of the Income-tax Act, 1961, mandates the payment of interest on excess advance tax paid by the assessee up to the date of the revised assessment. The term "regular assessment" includes both the initial and revised assessments. Consequently, the court allowed the petition and directed the Income-tax Officer to pay interest on the refunded amount in accordance with section 214(1) till the date of the revised assessments.
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