9911796707
TMI Blog1993 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... February 28, 1986, the Assessing Officer completed the assessment for the assessment year 1983-84 under section 143(3) of the Act. The assessed income was Rs. 57,16,460, The Assessing Officer computed the tax and surcharge payable by the petitioner in respect of such income after giving credit for the entire amount paid by the petitioner by way of advance tax including the said sum of Rs. 30 lakhs. The petitioner preferred an appeal from the order dated February 28, 1986. By an order dated November 24, 1988, the appeal was partially allowed by the Commissioner of Income-tax (Appeals). By an order dated March 11, 1988, the Assessing Officer made a fresh assessment in respect of the assessment year 1983-84 in accordance with the order dated February 20, 1988, under section 251 of the Act. By a notice under section 154 of the Act dated March 14, 1988, the Assessing Officer gave notice of rectification and proposed to include a sum of Rs. 2,50,000 in the petitioner's total income for the assessment year in question. By an order dated March 28, 1988, a rectification order was passed computing the total income for the assessment year 1983-84 at Rs. 36,50,980. The petitioner preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x due on regular assessment, cannot ignore such payment, then for the purpose of calculating interest also, such payment cannot be kept out of consideration. Even otherwise, in view of the reference to the date from which interest is to be calculated, namely, April 1, next following the financial year in which the advance tax was payable, that tax must be given credit for in calculating the amount of interest. Any payment made prior to April 1, i.e., before the commencement of the relevant assessment year, has to be taken into account. For the reasons aforesaid, we are of the opinion that the assessee is entitled to interest if the conditions stated in section 214 are satisfied even though the assessee might not have paid the advance tax by instalments on the due date(s)." The date of regular assessment for the purpose of section 214 of the Act in this case would be August 4, 1989, when effect was given by the Assessing Officer to the appellate order dated October 6, 1988. (See Chloride (India) Ltd. v. CIT [1977] 106 ITR 38 (Cal) and General Fibre Dealers Ltd. v. ITO [1979] 116 ITR 40 (Cal). Although directions for filing affidavits were given as far back as on May 2, 1990, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Income-tax. As a consequential relief, the respondent claimed payment of interest under section 214 of the Act. The dispute, in this case, relates to the assessment year 1983-84, corresponding to the previous year ending on December 31,1982. In respect of the said assessment, the respondent submitted an estimate of advance tax on June 14, 1982, in Form No. 29 and paid an aggregate sum of Rs.2,33,393 in three instalments on June 14, 1982, September 30, 1982, and December 15, 1982. Subsequently, on March 15, 1983, the respondent filed an estimate of advance tax in Form No. 29 and paid a further sum of Rs. 30,00,000 by way of advance tax for the assessment year 1983-84 on that very day. On June 29, 1983, the respondent filed its return of total income for the assessment year 1983-84 declaring an assessable income of Rs. 30,00,000. The respondent requested the Income-tax Officer to make a provisional assessment for the assessment year 1983-84 under section 141 of the said Act. The Income-tax Officer, however, refused to make a provisional assessment upon the respondent for the assessment year 1983-84 on the ground that the sum of Rs. 30,00,000 paid by the respondent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 13,63,085 as refundable to the respondent for the said assessment year. The respondent claimed interest under section 214 of the said Act on the entire amount of refund and made an application dated March 28, 1988, to the Income-tax Officer. The respondent also filed a revision petition before the Commissioner of Income-tax (Central-II), Calcutta, under section 264 of the said Act. The only point made out by the respondent in the said revision petition was that the tax of Rs. 32,33,393 paid by the respondent-assessee within the financial year ending March 31, 1983, corresponding to the assessment year 1983-84 should have been treated as advance tax and the respondent-assessee should be granted interest under section 214 of the said Act till the date on which the Income-tax Officer finally gave effect to the appellate order passed by the Commissioner of Income-tax (Appeals) in this case. It was also contended by the respondent that the Income-tax Officer was wrong in treating Rs. 30,00,000 paid by the assessee on March 15, 1983, as otherwise payment and not as payment of advance tax. The Commissioner of Income-tax (Central-II), Calcutta, by his order dated November ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax has to be paid on the date(s) stipulated under section 211 for payment of such instalments. It only provides that instalments must have been paid during the financial year in which they are payable. Hence, 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 the tax due on regular assessment, there is no reason why such tax should not be treated as advance tax. It is a payment in advance towards tax on regular assessment. If the Revenue, for the purpose of determining the tax due on regular assessment, cannot ignore such payment, then, for the purpose of calculating interest also, such payment cannot be kept out of consideration. Even otherwise, in view of the reference to the date from which interest is to be calculated, namely, April 1, next following the financial year in which the advance tax was payable, that payment must be given credit for in calculating the amount of interest. Any payment made prior to April 1, that is, before the commencement of the relevant assessment year, has to be taken into account. In the course of hearing, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the further rectificatory order passed by the Income-tax Officer on April 11, 1979. On appeal, the Tribunal upheld the validity of jurisdiction under section 263 assumed by the Commissioner of Income-tax. On the merits, the Tribunal held that for all intents and purposes, the regular assessment in that case was the one that was made on August 29, 1978, under section 143(3) read with section 144B and that the order passed by the Income-tax Officer on December 28, 1978, was not an order passed either originally or in consequence of giving effect to any appellate order in this regard and, therefore, could not be called a regular assessment. The Tribunal also held that the order passed by the Income-tax Officer on April 11, 1979, could not be called a regular assessment. It is while upholding the order of the Commissioner of Income-tax on the merits, the Tribunal had observed that in view of the instructions given by the Board and the conflicting case-law on the point of granting of interest under section 214 of the Income-tax Act, 1961, it was not a case of rectification. Consequently, the appeal filed by the assessee was dismissed. There, the Division Bench of this court proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard under section 119 of the Income-tax Act, 1961. Under section 119, the Board can issue instructions and directions to the income-tax authorities under the Board. If the Board considers it desirable or expedient, the Board can also direct any income-tax authority, other than the appellate authority, to grant relief to the assessee even though limitation had set in for making any claim for exemption, deduction, refund or any other relief under the Income-tax Act. In the instant case, the assessee-trust had approached the Board for grant of certain reliefs. The Board issued necessary directions to the Income-tax Officer and those directions were carried out by the Income-tax Officer by an order of rectification. Actually, there were no errors apparent in the order of the Income-tax Officer. It is only to give effect to the direction of the Board that the Income-tax Officer rectified the order of assessment. This order of assessment cannot be treated as a regular assessment under any circumstances. Therefore, the assessee cannot claim interest under section 214 on the ground that the tax determined on regular assessment was less than the advance tax paid. Question No. 2 is, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper Mills Ltd.'s case [1990] 181 ITR 454 (Cal), that the Commissioner was not justified in holding that Rs. 30 lakhs although paid during the relevant financial year, was not payment of advance tax eligible for interest under section 214. Counsel for the Revenue sought to rely on the judgment of the High Court of Andhra Pradesh in Kangundi Industrial Works (P.) Ltd.'s case [1980] 121 ITR 339, where it was held that the assessee is entitled to interest under section 214 of the Act, on the advance tax paid in excess of the income-tax, finally determined as payable on regular assessment only if the assessee had paid the instalments of advance tax by the due dates. The preponderance of judicial opinion is, however, to the contrary. There is a string of judicial precedents expressing the view that irrespective of the dates on which the instalments of advance tax are paid, interest would be payable on the excess advance tax paid, if two conditions are satisfied, that is, firstly the entire amount of advance tax is paid up and, secondly, it is paid up before the end of the financial year. The view taken by the court in Ajoy Paper Mills Ltd.'s case [1990] 181 ITR 454 (Cal) is supported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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