Cheque payment of advance tax relates back to delivery date, securing section 214 interest and an appealable refusal.

Payment of advance tax by cheque was treated as effective from the date of delivery, not the date of encashment, so the assessee was regarded as having paid within time for the purpose of interest under section 214. Refusal to grant statutory interest under section 214 was also treated as an appealable order where the appellate provision permitted it, making the appeal competent. Both points were answered in favour of the assessee and against the Revenue.

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Issues: (i) Whether interest under section 214 of the Income-tax Act, 1961 was payable in respect of advance tax paid by cheque on the date of delivery of the cheque or only on the date of encashment. (ii) Whether an appeal lay against the Income-tax Officer's refusal to grant interest under section 214 under section 246(c) of the Income-tax Act, 1961.

Issue (i): Whether interest under section 214 of the Income-tax Act, 1961 was payable in respect of advance tax paid by cheque on the date of delivery of the cheque or only on the date of encashment.

Analysis: The payment of tax by cheque was held to relate back to the date on which the cheque was delivered, following the earlier binding view that payment by cheque takes effect from the date of delivery and not the date of encashment. On that basis, the assessee was treated as having made the advance tax payment within time for the purpose of section 214.

Conclusion: The assessee was entitled to interest under section 214 on the second instalment of advance tax, and the answer was in favour of the assessee and against the Revenue.

Issue (ii): Whether an appeal lay against the Income-tax Officer's refusal to grant interest under section 214 under section 246(c) of the Income-tax Act, 1961.

Analysis: The refusal to grant statutory interest was treated as an appealable matter, and the appellate remedy was held to be competent under the provision governing appeals against such orders.

Conclusion: The appeal before the Appellate Assistant Commissioner was competent, and the answer was in favour of the assessee and against the Revenue.

Final Conclusion: Both referred questions were answered against the Revenue, confirming the assessee's entitlement to interest and the maintainability of the appeal.

Ratio Decidendi: Payment of tax by cheque is effective from the date of delivery of the cheque, and refusal to grant statutory interest is an appealable order where the statute so permits.

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