Reassessment cannot create section 215 interest where advance tax already exceeded assessed tax in the original regular assessment.

Interest under section 215 could not be imposed on a reassessment under section 147 where the original regular assessment showed advance tax paid exceeding the assessed tax, because the statutory foundation for interest under section 215(1) was absent at that stage. The Calcutta HC treated the first assessment under section 143 or section 144 as the relevant regular assessment for this purpose, and held that a later reassessment does not retrospectively create liability to interest. The issue was answered in favour of the assessee and against the Revenue.

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Issues: Whether interest under section 215(3) of the Income-tax Act, 1961 could be levied on a reassessment under section 147 when, in the original regular assessment, no interest under section 215(1) was chargeable because the advance tax paid exceeded the assessed tax.

Analysis: The regular assessment for the purpose of the Act means the first assessment made under section 143 or section 144. Once the advance tax paid exceeds the tax assessed in that regular assessment, the statutory basis for charging interest under section 215 is absent. A later assessment or reassessment does not convert the original position so as to create liability to interest under section 215.

Conclusion: Interest under section 215(3) could not be levied on the reassessment. The question was answered in the affirmative, in favour of the assessee and against the Revenue.

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