Law: Income Tax Act, 1961

Section: 215

[Indian Income Tax Act, 1961]......Advance tax---Interest payable by assessee---Advance tax less than seventy-five percent. of "assessed tax "--Interest levied under S.215---Assessed tax means tax determined on "regular assessment" ---Regular assessment refers to first order of assessment---Reduction of tax due to appellate order---Interest under Section. 215 can re charged even if advance tax Paid is not less than 75 % of tax determined in pursuance of appellate order--Indian Income Tax Act, 1961, S. 215. It is clear from subsection (1) of section 215 of the Income Tax Act, 1561, that the liability to pay interest arises if, in any financial year, the advance tax paid by the assessee falls short of seventy-five-percent. of the assessed tax. In that event, interest is payable on the deficient amount from the first day of April of the next financial year up to the date of regular assessment: "Assessed tax" has been defined in subsection (5) to mean the tax determined on the basis of the "regular Assessment". Thus, both for the P4rposes of determining the liability of the assessee to pay interest under this section and also the date up to which intercept is to be charged, the material assessment is the "regular assessment". Regular assessment means and refers to the original assessment made under section 143 or 144 of the Act. For the assessment year 1976-77, the advance tax paid by the assessee was less than 75 percent. of the Assessed tax and, therefore, the Income-tax Officer levied interest under section 215 from the 1st day of the assessment year up to the date of assessment- The Commissioner of Income--tax (Appeals) partly allowed the appeal of the assessee so that there was reduction of the tax payable by the assessee. This resulted in the reduction of the difference between the assessed tax and the advance tax paid by the assessee. The Income-tax Officer, accordingly, reduced the interest levied under section 215 of the Act as contemplated by subsection (3) of section 215. The assessee was aggrieved by the reduction of the interest as, according to him, the liability to pay interest under section 215 itself should have been re-determined with reference to…

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