1993 (10) TMI 20

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..... lso prayed for a writ of mandamus asking respondent No. 2, the Income-tax Officer, to grant interest under section 214 of the Income tax Act, 1961 (hereinafter referred to as "the Act"). The facts relevant to decide this petition shortly stated are as under : The petitioner was assessed under the Act for the assessment year 1976-77, the corresponding accounting year being the financial year 1975-76. The petitioner was assessed on the income of Rs. 71,640 by the assessment order dated July 25, 1978, vide annexure "A" to the petition. As per the order passed by the Income-tax Officer, the total tax payable by the petitioner was Rs. 38,003 whereas tax deducted at source from the income of the assessee and paid to his account was Rs. 23,933 .....

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..... 22, 1976. The learned advocate, relying upon the decision in the case of Chandrakant Damodardas v. ITO [1980] 123 ITR 748 (Guj), submitted that there is no indication in section 214 that the dates of instalments are strictly to be adhered to. It was submitted that in view of the language used in section 214 particularly with reference to the 1st day of April, and not with reference to the dates on which the instalments are actually paid by the assessee, it is clear that the Legislature intended to provide that irrespective of the dates on which the instalments of advance tax are paid, interest will be payable on the excess advance tax if two conditions are satisfied : (i) The entire amount of advance tax is paid up, and, (ii) It is p .....

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..... se, observed that there is no specific provision for payment of interest on the interest amount. Interest would be payable at the same rate at which the excess amount carries interest. In other words, the court held that the amount payable by way of interest would carry simple interest at the rate of 15 per cent. per annum from the date it became payable to the date it is actually paid. The court held that : "The Government is liable to pay interest, at the rate applicable to the excess amount refunded to the assessee, on the interest amount which had become due under section 214(1) of the Act." In the instant case, so far as interest on interest is concerned, as per the provisions of the Act, at the relevant time, from July 25, 1978, t .....

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