9911796707
TMI Blog1995 (1) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequent to the appellate orders. The petitioner is a company and is an assessee under the Income-tax Act, 1961. For the assessment year 1979-80, the assessee paid a total sum of Rs. 4,55,781 prior to the order of assessment as advance tax and tax deducted at source, on March 15, 1979, and March 24, 1979. By the original assessment order dated September 22, 1982, total tax payable was assessed at Rs. 9,24,800. The entire balance amount of tax was also paid. On appeal, the tax liability was reduced to Rs. 5,78,044. A sum of Rs. 2,16,538 became refundable to the petitioner. On an application of the petitioner dated April 30, 1986, a sum of Rs. 1,24,478 was granted as interest under sections 244(1A) and 214(1) of the Income-tax Act. Again o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax paid lost its identity the moment it was adjusted towards the tax liability created under the regular assessment and took the shape of payment of tax in pursuance of the order of assessment. While considering the claim, it is contended that the second respondent--Commissioner of Income-tax--proceeded as if the petitioner is claiming interest on the excess advance tax paid. The case of the petitioner is that it is entitled to interest on the amount adjusted from advance tax and treated as payment of tax pursuant to the order of assessment which became refundable consequent to the appellate orders. In the counter-affidavit filed by the first respondent, it is stated, inter alia, that the claim of interest under section 244(1A) by the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as advance tax changes its character as advance tax and partakes of the character of tax paid as per demand. A Full Bench of this court in CIT v. G. B. Transports [1985] 155 ITR 548 held that in case there is excess payment of advance tax, the excess is refundable to the assessee and the excess carries interest as provided in section 214. Once that process is over, by an order under section 143, the amount paid as advance tax changes its character as advance tax and partakes of the character of tax paid as per demand. What is credited is treated as tax paid. The Punjab and Haryana High Court in CIT v. Leader Engineering Works [1989] 178 ITR 529 while considering the import of advance tax paid and section 244(1A) of the Income-tax Act laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was actually made, but, as in this case, the petitioner had claimed interest only up to the date of the revised assessment, the interest would be allowed up to that date. Though the advance tax was originally paid during the financial year 1972-73, the initial assessment was made in 1976, and this should be treated as having been converted into a tax payment on the date of the initial regular assessment. The payment of advance tax has material significance only till the initial regular assessment is made and thereafter it has no separate existence by itself but gets merged in the tax demand payable by the assessee. Therefore, even the payment of advance tax can be worked into the provisions of section 244(1A). On the language of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition was deleted. The final order disclosed a loss and consequently refund was made of Rs. 5,03,280 including interest under section 244(1A). The assessee claimed interest both under section 132B(4) and section 244(1A). The income-tax authorities did not grant interest under section 132B(4). This court held as follows (headnote): " The cumulative effect of sections 132(5), 132B(1) and (4) of the Income-tax Act, 1961, is that the person from whom money or other assets converted into money is retained after seizure is entitled to interest at 12 per cent. per annum on the said amount of money provided the same is in excess of the amount of money that is required to meet the liabilities either existing or that would come into being on making ..... X X X X Extracts X X X X X X X X Extracts X X X X
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