Law:

Section:

SECTION 215 OF THE INCOME-TAX ACT, 1961 - ADVANCE TAX - INTEREST PAYABLE BY ASSESSEE - WHETHER PAYMENT OF TAX DURING FINANCIAL YEAR THOUGH BEYOND DUE DATE OF PAYMENT OF INSTALMENT OF ADVANCE TAX, IS TO BE TREATED AS ADVANCE TAX AND, HENCE, NO INTEREST IS LEVIABLE ON ASSESSEE UNDER SECTION 215 IN SUCH A CASE - HELD, YES Facts The assessee-company was liable to pay advance tax in respect of the assessment year 1972-73, the assessee's accounting year being 1-12-1970 to 30-11-1971. The assessee paid last instalment of advance tax on 22-12-1971 instead of 15-12-1971. The assessment was duly completed by the ITO. However, on 13-10-1978, the assessee was served a show-cause notice asking it as to why interest under section 216 should not be charged from it. Subsequently, the ITO held that the payment made on 22-12-1971 was made beyond the date of the last payment of advance tax and could not be treated as advance tax and he charged interest under section 215. The Commissioner rejected the assessee's revision petition. On writ: Held The payment made by the assessee on 22-12-1971 having been treated by the revenue as a payment of advance tax, the revenue could not for the purposes of section 215 exclude that payment from the computation of the advance tax paid and claim that there was an under-payment of advance tax which attracted the provisions of section 215. Interest under section 215 is payable by an assessee where in any financial year he has paid advance tax and it is less than 75 per cent of the assessed tax. The interest is payable on the amount of the shortfall. Interest is payable commencing 1st April and for the period the shortfall remains unpaid by the assessee. Where the shortfall amount is paid before 1st April next following the financial year, no interest is payable. Interest cannot and, under section 215, is not payable on an amount after that amount has been paid over. The words 'or otherwise' in section 215(2) are of the widest amplitude and cover all payments of tax before the date of completion of the regular assessment. In the instant case, the last payment made on 22-12-1971 was a payment of advance tax and had to be taken into account in…

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