Delhi H.C : Whether on facts and in the circumstances of the case, the Tribunal is correct in law in holding that interest is payable under s. 214 on the payment of Rs. 1.36 lakhs made on 14th Jan., 1975 ?

Counsel Appeared

R.C. Pandey with Ms. Prem Lata Bansal & Ajay Jha, for the Petitioner : None, for the Respondent

JUDGMENT

ARIJIT PASAYAT, C.J. :

At the instance of Revenue, the following question has been referred by Tribunal, Delhi Bench-B, under s. 256(1) of the IT Act, 1961 (in short ‘the Act’), for opinion of this Court : “Whether on facts and in the circumstances of the case, the Tribunal is correct in law in holding that interest is payable under s. 214 on the payment of Rs. 1.36 lakhs made on 14th Jan., 1975 ?”

2. Factual position is almost undisputable and is as follows : Assessee, a private limited company, filed its return for asst. yr. 1975-76 for which the previous year ended on 30th April, 1974. Assessee claimed interest under s. 214 of the Act on the ground that advance tax paid by it was in excess of tax payable. Same was disallowed by the ITO on the ground that last instalment of advance tax of Rs. 1,36,000 was paid late by the assessee. This was due on 15th Dec., 1973, but, in reality, was paid on 14th Jan., 1975. Assessee preferred appeal before the Appellate Assistant Commissioner (AAC in short). Being of the view that ITO was erroneous in his conclusions, AAC allowed the claim. Matter was carried in further appeal by Revenue before the Tribunal. Tribunal affirmed AAC’s order and dismissed Revenue’s appeal. Though Tribunal accepted Revenue’s stand that circulars of the Board F.No. 12/80/64-IT(B), dt. 1st June, 1965, and 23rd July, 1974, relied upon by the AAC, were not very relevant, yet held that a plain reading of s. 214 of the Act shows that assessee’s claim was in order. On being moved for reference, the question as stated above has been referred for our opinion.

3. We have heard learned counsel for Revenue. There is no appearance on behalf of assessee in spite of service of notice. Learned counsel for Revenue submitted that when time stipulation has been fixed by the statute, any payment made beyond the stipulated date not qualify for grant of interest under s. 214 of the Act.

4. Sub-s. (1) of s. 214 at the relevant time read as follows : “214. (1) The Central Government shall pay simple interest at nine per cent per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under ss. 207 to 213 exceeds the amount of the tax determined on regular assessment from the 1st day of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year, during which it is payable by reason of the provisions of s. 213, interest as aforesaid shall also be payable on that instalment from the date of its payment to the date of regular assessment : Provided that in respect of any amount refunded on a provisional assessment under s. 141A, no interest shall be paid for any period after the date of such provisional assessment.” The pivotal expression appearing in the said provision is “the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under ss. 201 to 213”. It would, therefore, be clear that reference is made not only to s. 211 of the Act but also to the cluster of provisions referred in sub-s. (1) of s. 214. Secs. 207 to 213 appearing in Part-C (Advance payment of tax) of Chapter XVII of the Act deal with “Collection and recovery of tax”. As was observed by the Full Bench of Andhra Pradesh High Court in Bakelite Hylam Ltd. vs. CIT (1993) 113 CTR (AP)(FB) 33 : (1993) 202 ITR 145 (AP) : TC S4.390, ss. 207 to 213 provide for advance payment of tax during the financial year, in all its facets, for the computation of the tax so payable, for the instalments in which such tax is payable, for the dates on which such instalments are to be paid and in certain cases for the deferment ofpayment even beyond the financial year. Tax payable in advance is compendiously referred to as ‘advance tax’. Therefore, when sub-s. (1) of s. 214 refers to ss. 207 to 213, there is no justification for looking only at s. 211 as learned counsel for Revenue want us to do and conclude that unless the instalments are paid strictly as per s. 211, interest is not payable under s. 214 on the excess amount of advance tax paid during the financial year. It is to be noted that s. 208 provides that advance tax shall be payable during the financial year. Sec. 211 deals with instalments of advance tax and due dates. Sec. 208 deals with conditions of liability to pay advance tax and at the relevant time referred to payment during the financial year, as noted above. We are in agreement with the view expressed by the Full Bench of Andhra Pradesh High Court in Bakelite Hylam’s case (supra). Therefore, our answer to the question referred is in the affirmative, in favour of assessee and against Revenue. The reference stands disposed of accordingly.

[Citation : 248 ITR 536]