9911796707
TMI Blog1996 (8) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... advance tax of Rs. 20,85,000 for the asst. yr. 1978-79 under s. 210 of the Act in three instalments. It paid two instalments amounting to Rs. 13,90,000. Then it filed on upward estimate under s. 212(3A) and paid Rs. 12 lakhs. Thus the total tax paid was Rs. 25,90,000, which was in excess of the advance tax demanded by Rs. 5,05,000. The ITO in the assessment proceedings treated this entire amount of Rs. 25,90,000 as advance tax and on that basis granted interest under s. 214 on the refund of tax. Subsequently, the CIT found that the grant of interest under s. 214 to the assessee on the sum of Rs. 5,05,000 being the excess tax paid by it than demanded under s. 210 was not correct and, therefore, the order of the ITO was erroneous and prejudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the CIT passed under s. 263, directing the ITO to withdraw the interest under s. 214 already granted on Rs. 5,05,000. 4. Before us the learned standing counsel appearing for the Department submitted that the assessee is not entitled to file an upward estimate, while the correct tax was demanded under s. 210 of the Act. It was further submitted that amount paid in excess of what is demanded under s. 210 of the Act cannot be treated as payment of advance tax. According to the learned standing counsel, the assessee was not obliged to file on upward estimate inasmuch as the tax payment of Rs. 25,90,000 did not exceed Rs. 20,85,000 demanded under s. 210 of the Act by 33-1/3 per cent. Therefore, according to the learned standing counsel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as payment of advance tax, especially when the Department accepted such payment. For these reasons, it was submitted that the Tribunal was correct in holding that action under s. 263 of the Act is not possible in the present case. 6. The point for consideration is whether the assessee is entitled to interest under s. 214 of the Act on a sum of Rs. 5,05,000. Under s. 210 of the Act, the Department demanded advance tax of Rs. 20,85,000. By way of first two instalments, the assessee has paid a sum of Rs. 13,90,000. For payment of third instalment, the assessee filed an upward estimate and paid a tax of Rs. 12 lakhs under s. 212 (3A) of the Act. The tax finally determined for the assessment year for the consideration was Rs. 24,70,114. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g as the payment was accepted, it could only be towards advance tax. Any payment made before the end of the accounting year for which assessment was made should be taken as advance tax. Since the amount paid by the assessee was accepted by the ITO as advance tax and the amount paid was over and above what was due by way of tax, no interest under s. 139(8) could be levied". 8. In the case of CIT vs. Ajoy Paper Mills Ltd. (1990) 181 ITR 454 (Cal) : TC 4R.571, Calcutta High Court, while considering the provisions of ss. 211 and 214, held that: "Whatever is paid before the close of the financial year would qualify as advance tax. If credit is given by the Department for the belated payments made during the financial year in calculating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basing upon the previous year's assessment is very much lower than the actual tax finally determined, the assessee visualising increase in the income, filed an upward estimate for the third instalment under s. 212(3A). This visualisation of the assessee gets justified when the tax finally determined was at Rs. 24,70,114. Further, Rs. 12 lakhs paid by the assessee by way of third instalment under s. 212(3A) was accepted by the Department as advance tax. If once the payment was accepted as advance tax and the difference would be the tax demanded and the total tax paid was very negligible, it cannot be said that the assessee is not entitled to interest under s. 214 of the Act on the excess payment of tax. This conclusion we have arrived at on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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