Law: Income Tax Act, 1961

Section: 207,213

Income-tax---Advance tax---Interest payable by Government---Scope of section 214, Indian Income Tax Act, 1961---Payment of instalments of advance tax after due dates---Liability of Government to pay interest not affected---Indian Income Tax Act, 1961, S.2141 [Kangundi Industrial Works (P.) Ltd. v. ITO (1980) 121 ITR 339 (AP) overruled]. Sections 207 to 213 of the Income Tax Act, 1961, 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 of payment even beyond the financial year. The tax payable in advance is compendiously referred to as "advance tax". Therefore, when subsection (1) of section 214 refers to sections 207 to 213, there is no justification for looking only at section 211 and to conclude that unless the instalments are paid strictly as per section 211, interest is not payable under section 214 on the excess amount of advance tax paid during the financial year, ignoring section 208 which provides that advance tax shall be payable during the financial year. There is no justification also for relying on the provisions of sections 218 and 221 for interpreting section 214. Section 218 specifically deals with defaults in payment of instalments of advance tax on the dates specified in section 210 or in section 211. If an assessee does not pay any instalment of advance tax on the date specified under section 210 or in section 211, under section 218, he is deemed to be an assessee in default in respect of such instalment or instalments and penalty will be leviable under section 221. But from that it does .not follow that instalments of advance tax cannot be paid after the specified dates or that amounts paid as advance tax after the specified dates though during the financial, year are not to be treated as advance payment of tax. If the Income-tax Officer is satisfied that the default is for good and sufficient reason no penalty shall be levied as per the said proviso. It is obvious from this that instalments of advance tax can also be paid after…

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