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Section 147, read with section 214 of the Income-tax Act, 1961 [Corresponding to section 34, read with section 18A(5) of the Indian Income-tax Act, 1922] - Income escaping assessment - General - Assessment year 1952-53 - Whether section 34 of 1922 Act could not be relied upon to support proceedings to recover excess interest allowed in original assessment under section 18A(5) of 1922 Act - Held, yes FACTS For the assessment year 1952-53, the assessment of the assessee-company was completed under section 23(3) and the ITO allowed certain interest under section 18A(5) on the advance tax. Subsequently, the aforesaid provision relating to interest was amended; and, according to the amendment, the assessee would only be entitled to interest till the last date of the year of assessment. Consequently, the ITO issued notice under section 34(1)(b) to recover excess interest paid to the assessee. On second appeal, the Tribunal held that section 34 of the Act could not be relied on for the purpose. On reference : HELD The Bombay High Court had in Simplex Mills Ltd. v. Subramanyam, ITO, [1958] 34 ITR 711 held that the payment of interest by the Central Government under section 18A(5) on tax paid in advance, was neither a relief under the Act, nor attributable to income, profits or gains, chargeable to income-tax, and though the excess payment of interest could be recovered under section 35, it could not be recovered under section 34. It followed that the rule is well settled that section 34 could not be relied upon to support proceedings to recover excess interest allowed in the original assessment under section 18A(5). Note : The case was decided in favour of the assessee. CASES REFERRED TO Simplex Mills Ltd. v. Subramanyam [1958] 34 I.T.R. 711 (Bom.) and CIT v. Nonshi Devshi Kattawala (P.) Ltd.[1962] 45 I.T.R. 47 (Ker.) JUDGMENT Ansari, CJ.-The facts in the reference can be briefly narrated. The assessee had paid the advance tax of Rs. 1,00,431-7-0 for the assessment year 1952-53, and on October 10, 1952, the assessment under section 23(3) of the Indian Income-tax Act was finalised. The Income-tax Officer then allowed Rs. 1,879-1-0 as interest on the advance tax; but on…

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