Law:

Section:

Section 214(1) of the income-tax act, 1961-Advance tax-Interest payable by government-Whether, where excess advance tax is not found to have been paid by assessee on determination of tax on first assessment, but subsequently in revised assessment it is seen that such excess advance tax had been paid by assessee, interest under section 214(1) would be due on such excess refunded-Held, yes-Whether such interest under section 214(1) would be due not only up to date of first assessment but up to date of revised assessment-Held, yes-Whether, if section 214(1) is construed as entitling assessee to interest up to date of revised assessment, there would be double payment of interest to assessee after 31-10-1975 by virtue of section 244(1A)-Held, no Facts The petitioner firm had paid the advance tax for the assessment years 1964-65 to 1967-68 and 1969-70. From the assessment orders passed in respect of these assessment years, appeals to the AAC were taken. The AAC set aside the assessments and directed the ITO to pass fresh assessment orders. The fresh assessment orders, which were passed on 24-9-1976, mentioned that fresh assessments were made under section 143(2). They also referred to the original assessments having been set aside in appeal with a direction to make fresh assessments. Consequent on such redetermination, the ITO made refunds of certain amounts, which represented the difference between the advance tax paid and the tax payable on account of such assessments made afresh. In doing so, interest under section 214(1) on these amounts was not paid to the assessee, on the ground that reference to 'regular assessment' in section 214(1) was to the 'original assessment'. On writ, the revenue contended that where excess was not found to have been paid by the assessee on the determination of tax under the order of the first assessment, even though subsequently in the revised assessment it was seen that such excess was paid by the assessee by way of advance tax, interest under section 214(1) would not be due on such excess refunded. The alternative contention was that though even if interest was payable on the amount of excess determined on the basis of the revised…

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