9911796707
TMI Blog1998 (1) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by the assessee is not less than 75 per cent. of the tax assessed in pursuance of the order of an appellate or revisional authority?" This reference pertains to the assessment year 1976-77, the relevant previous year being the year ended March 31, 1976. For this assessment year, the assessee was assessed by the Income-tax Officer by his order of assessment dated May 28, 1979, and the total income was computed at Rs. 8,31,250 and the tax payable was determined at Rs. 6,11,019. As the advance tax paid by the assessee was less than seventy-five per cent. of the assessed tax, simple interest at the rate of twelve per cent. per annum from the 1st day of the assessment year up to the date of assessment was levied by the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduction in the shortfall but it cannot be recomputed with reference to the reduced income. The assessee appealed to the Income-tax Appellate Tribunal ("the Tribunal"). The Tribunal accepted the contention of the assessee and held that having regard to the scheme of the Act and the context in which it appeared in section 215, the expression "regular assessment" would include an order passed by the Income-tax Officer pursuant to the direction of the appellate authority. The Tribunal relied upon the decision of the Calcutta High Court in Chloride India Ltd. v. CIT [1977] 106 ITR 38 and observed that interest under section 215(1) cannot be maintained when the advance tax paid by the assessee is not less than seventy-five per cent. of the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the regular assessment (reduced by the amount of tax deductible in accordance with the provisions of sections 192 to 194, section 194A, section 194C, section 194D and section 195) so far as such tax relates to income subject to advance tax and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made." (emphasis supplied) It is clear from sub-section (1) of section 215 of the Act that the liability to pay interest arises if, in any financial year, the advance tax paid by the assessee falls short of seventy-five per cent. of the assessed tax. In that event, interest is payable on the deficient amount from the first day of April of the next financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a result of an order of rectification, appeal or revision, etc., the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded to the assessee and observed that it was necessary to introduce the above provision because "regular assessment" only meant the first assessment made in the regular course by the Income-tax Officer. It was observed that, prior to the insertion of sub-section (3), the amount of interest charged under section 215 could not have been reduced as a result of any further proceedings under the Act whereby the quantum of assessment and consequently the tax payable stood reduced. The Supreme Court clearly held that the expression "regular assessment" in various sections of the Act had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above conclusion, this court dissented from the contrary view taken by the Calcutta High Court in Chloride India Ltd.'s case [1977] 106 ITR 38 which now stands impliedly overruled by the decision of the Supreme Court in Modi Industries Ltd.'s case [1995] 216 ITR 759. It is clear from the above discussion that the expression "regular assessment" appearing in section 215 of the Act has been used in no other sense than the first order of assessment passed under section 143 or 144 of the Act. That being so, the Tribunal was not justified in this case in holding that interest under section 215(1) of the Act cannot be maintained when the advance tax paid by the assessee is not less than seventy-five per cent. of the tax assessed in pursuance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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