Law:

Section:

Section 214, read with section 210, of the Income-tax Act, 1961 - Advance tax - Interest payable by Government - Assessee-corporation paid advance tax in three equal instalments - Assessing authority taking into account business loss suffered by assessee and depreciation allowance, framed regular assessment under section 143(3) and held that entire amount of advance tax paid by assessee was refundable to it with interest thereon under section 214 - Thereafter, assessing authority allowed interest only on first and third instalments of advance tax but did not pay any interest in respect of second instalment, which was paid by assessee after date specified in section 210(1) - Whether in view of decision of Division Bench of High Court in CIT v. Roadmaster Industries of India (P.) Ltd. [1992] 193 ITR 639/ 60 Taxman 227 (Punj. & Har.), interest on second instalment at rate of 12 per cent was payable to assessee - Held, yes - Whether since assessee had been unlawfully deprived of use of interest amount which had been illegally withheld by respondent, assessee was also entitled to payment of interest on interest so withheld - Held, yes FACTS The ITO issued a notice to the assessee-corporation under section 156, in pursuance of an order made by him under section 210(1), requiring the assessee-corporation to pay to the credit of the Central Government a sum of certain amount by way of advance tax in three equal instalments. Thereafter, the assessee-corporation estimated its income and accordingly, submitted same to the ITO under section 212(1). On the basis of the calculations by the assessee-corporation, the advance tax payable by the assessee-corporation was determined. The assessee-corporation paid the aforesaid advance tax in three equal instalments. Thereafter, the assessee-corporation filed its return under section 139(1) declaring a loss. Subsequently, a revised return was also filed by the assessee and a request was made to the ACIT for refund of the entire amount of advance tax paid by the assessee after making provisional assessment under section 141A. Thereafter, the assessee received a pay order by way of refund of advance tax. The assessing authority…

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