Law: Income Tax Act, 1922

Section:

Income tax-----Return Delay in filing return Levy of interest Payments made towards advance tax after due dates but during relevant financial year must be taken into account. JUDGMENT A. RAGHUVIR, C.J. The subject matter in this case relates to computation of interest under the Income tax Act, 1961. Whether interest can be charged when advance tax is paid during the financial year but not paid on the due date of payment is the issue. The Revenue authorities maintained that interest is payable. The decision of the Revenue is assailed in the instant case by the petitioner. The assessee in this case is the Sookerating Tea Co. (Pvt.) Ltd. at Dibrugarh, Assam, and was taxed to pay Rs. 1,05,687 for the assessment year 1975 76. The assessee made two payments in 1974, one on June 28, 1974, Rs. 3,923, the second one on September 20,1974, Rs. 3,923. The total of the two is Rs. 7, 846 in 1974. The assessee paid three amounts in 1975, one on March 18, Rs. 13,354. Two payments of Rs.10,000 and Rs.15,000 were made on March 29, 1975. The total of the three amounts is Rs. 38,354. The assessee paid Rs. 11,953 on October 21, 1976. The issue arises on the payments made in 1975. But to bring out the lis in the case, payments made during the financial years 1974 and 1976 are shown. The amount of Rs.7,846 if added to Rs.38,354, the figure is Rs.46,200 and that amount if deducted from the tax liability (Rs. 1,05,687 46,200) the balance is Rs.59,487. If Rs. 11,953 is further deducted the balance is Rs.47,534. These figures are shown only to explain how the computation is made in this case. A calculation memo was served on the assessee showing that between July 1, 1975, and April 30, 1976 (10 months), the amount of Rs. 7,846 was deducted and on Rs. 47,534 interest was ascertained under section 139 of the Act in the sum of Rs.9,784. The second item of interest is ascertained for the period April 1, 1975, to October 20, 1976 (one year six months the period of 23 days is ignored) on Rs.59,487. Interest is ascertained under section 215 of the Act showing it at Rs. 10,708. The assessee was served with a notice of demand to pay Rs.68,026. The assessee questioned the calculation made by the…

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