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TMI Blog1984 (2) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... . Act, 1961 (hereinafter referred to as " the Act "), on the ground that the interest already granted to the assessee under s. 214 of the Act should be withdrawn. The withdrawal of the interest allowed earlier to the assessee by the revocation order passed under s. 154 was as follows: The total amount of income-tax payable by the assessee was determined in the original assessment dated June 28, 1976, at Rs. 80,176. The tax deducted at source amounted to Rs. 62,501. Apart from the tax deducted at source, the assessee had also paid a total sum of Rs. 1,85,200 by way of cheques as advance tax, and the details of the payments are set out below : ----------------------------------------------------- Cheque date Date of realisation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the payments made on December 22, 197l, and February 29, 1972, should be deemed to be payment of advance tax, and, therefore, the assessee is entitled to interest under s. 214 of the Act. The Revenue took the matter in appeal to the Tribunal. Before the Tribunal, the assessee gave up its claim for interest on the sum of Rs. 5,200 paid by it on February 29,1972. Regarding the balance sum of Rs. 1,80,000 paid on different dates, the Appellate Tribunal agreed with the AAC and held that the assessee was entitled to interest on the refund due and dismissed the Departmental appeal. Aggrieved with the view taken by the Tribunal, the Revenue has sought and obtained a reference on the following two questions : " (1) Whether, on the facts and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradesh High Court held that as the assessee had committed default in making payment of advance tax of second and third instalments, it is not entitled to interest under s. 214 of the Act and that interest payable on the excess amount under s. 214 does not amount to refund of any amount paid as tax, and hence the claim of the assessee cannot be entertained even under s. 243 of the Act. The reasoning of the court for rejecting the claim of the assessee for interest under s. 214 of the Act was as follows (p. 341) : " A careful reading of s. 214 of the Act will indicate that the stress is not on the question whether all the instalments of advance tax were paid during the financial year, but the stress is that the instalments must have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e belatedly, the character of the amount received by the Revenue can only be advance tax and not an ad hoc payment as has been held by the ITO. The fact remains that the assessee is liable to be proceeded against for non-payment of the tax in time. However, if the payment has been accepted, it can only be deemed to be a payment towards advance tax. It is no doubt open to the Revenue to refuse the tax on the ground that it was not paid on the due date. When once the payment of tax paid as advance tax is accepted, the payment cannot be said to be not towards advance tax. . Any payment made before the end of the accounting year for which the assessment has been made should be taken to be an advance tax. We are not inclined to agree with the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modardas v. ITO [1980] 123 ITR 748, the Gujarat High Court has taken the view that the substance of the requirement in s. 211 is that before the end of the financial year, advance tax should be paid and the absence of the words " paid in accordance with ss. 207 to 213 " in s. 214 indicates that the dates of instalments are not to be strictly adhered to and that if they are not adhered to, interest will be payable. The learned judges took the view that in view of the language used in s. 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 instalment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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