Law: Income Tax Act, 1961

Section: 214,154,263,213,141A

Income-tax--- ----Advance tax---Interest payable by Government---Instalment of advance tax paid after due date but within financial year---Interest is payable on such amount---Indian Income Tax Act, 1961, S.214. In making the final assessment and reckoning the amounts due and payable, interest is allowed under section 214 of the Income Tax Act, 1961, from the first day of April of the next financial year. This is an indication to show that the financial year is taken as a unit and the amount paid during the financial year would be eligible for grant of interest under section 214 of the Income Tax Act, 1961. Though the instalment of advance tax was not paid on the due date but a little later, it does not lose its character as such. The payment- made during the financial year is entitled to interest under section 214 even though the payment was made after the prescribed date but during the financial year. JUDGMENT At the instance of the revenue, the Income-tax Appellate Tribunal, "A" Bench, Patna, has referred the following question of law for the decision of this Court: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessee was entitled to interest under section 214 in respect of the amount paid by it on March 20, 1972?" We heard counsel for the Revenue. The assessee-respondent is a company. The matter relates to the assessment year 1972-73. The accounting period ended on March 31, 1972. The assessment for the year 1972-73 was completed on January 30, 1974. The taxable income was assessed at a loss. Subsequently, the assessee filed an application to the Income-tax Officer that it had paid advance income tax in respect of the assessment year in question on which it had become entitled to receive interest under section 214 of the Income Tax Act, 1961. As this interest had not been allowed to it the assessee requested that an order under section 154 may be passed and the interest under section 214 be allowed to it. The officer allowed a sum of Rs.15,799 by way of interest for the amount paid by the assessee on December 30, 1971, March 20,1972, and May 1, 1972. Subsequently, the Income-tax Officer realised…

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