1990 (11) TMI 68 - HC - Income Tax

Kerala High Court Upholds Tax Interest Denial for Public Limited Company

The High Court of Kerala upheld the dismissal of a petition challenging the denial of interest on advance tax paid by a public limited company. The court, ... Advance Tax, Regular Assessment Issues: Interpretation of 'regular assessment' for the purpose of interest payment on advance tax.The judgment delivered by the High Court of Kerala involved the interpretation of the term 'regular assessment' in the context of interest payment on advance tax. The appellant, a public limited company, filed a petition to challenge an order passed by the Commissioner of Income-tax, which denied the appellant's claim for interest on advance tax paid. The appellant contended that interest should be paid up to the date of the revised assessment order, while the Commissioner interpreted 'regular assessment' to mean the initial assessment only. The court considered conflicting decisions from various High Courts regarding the definition of 'regular assessment' and noted that the Full Bench decision of the Kerala High Court in CIT v. G. B. Transports held that interest is payable only up to the date of the original assessment. The court, bound by the Full Bench decision, upheld the dismissal of the original petition by the single judge, concluding that the order in question was not liable to be annulled or quashed.The primary issue before the court was to determine the meaning of 'regular assessment' for the purpose of calculating interest on advance tax paid by the appellant. The appellant argued that interest should be paid up to the date of the revised assessment order, while the Commissioner contended that 'regular assessment' referred to the initial assessment only. The court noted conflicting decisions from different High Courts on this matter, with some courts supporting the appellant's position and others aligning with the Commissioner's interpretation.The court highlighted the Full Bench decision of the Kerala High Court in CIT v. G. B. Transports, which held that interest on advance tax is payable only up to the date of the original assessment. The court acknowledged the differing views of other High Courts but emphasized that it was bound by the precedent set by its own Full Bench decision. Therefore, the court upheld the dismissal of the original petition challenging the Commissioner's order, as the appellant's claim for interest beyond the original assessment date was not supported by the prevailing interpretation of 'regular assessment.'In conclusion, the court found that the appellant's writ appeal lacked merit and dismissed it based on the binding precedent established by the Full Bench decision in CIT v. G. B. Transports. The court affirmed the decision of the single judge to dismiss the original petition, as the order in question was deemed not liable to be annulled or quashed under the prevailing interpretation of 'regular assessment' for interest calculation on advance tax payments.