9911796707
TMI Blog1984 (3) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed tax on the total income as assessed under section 154 of the Act was Rs. 12,24,261. On 28-6-1977, the assessee paid Rs. 7,61,910 under section 140A of the Act leaving a balance of Rs. 4,62,351. The ITO charged interest under section 215 of the Act on the assessed tax from 1-4-1977 to 31-5-1977 and on the balance of the unpaid tax from 1-6-1977 to 30-6-1980. The Commissioner was of the opinion that the interpretation of the ITO of the provisions of rule 119A of the Income-tax Rules, 1962 ('the Rules') was incorrect and the ITO should have charged interest on the assessed tax from 1-4-1977 to 27-6-1977 and on the balance of unpaid tax from 28-6-1977 to 30-6-1980. According to him, there was a mistake committed by the ITO in charging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this purpose any fraction of a month shall be ignored ; and the period so rounded off shall be deemed to be the period in respect of which the interest is to be calculated ; (b) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored ; and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated." Clause (a) of the said rule relates to calculation of interest and is material for deciding this appeal. From the above it is clear that clause (a) requires that the period for which interest is to be charged has t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to charge interest on the entire assessed tax for 2 months and on the reduced amount of tax for 3 years only. The ITO charged interest for 2 months on the entire assessed tax and for 3 years and 1 month on the reduced amount of tax. So, of course, there was a mistake on the part of the ITO to charge interest on the reduced amount of tax inasmuch as he overcharged the assessee interest for 1 month. 6. But this mistake is not prejudicial to the interest of the revenue. On the other hand, by the mistake of the ITO, the revenue obtained interest on the amount of Rs. 4,62,351 for an extra month. 7. It is now settled law that the Commissioner can exercise his powers under section 263 only when both the conditions regarding the existenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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