Tribunal grants interest on excess tax payment, citing precedent. Assessee's appeal successful.

The Tribunal allowed the appeal, canceling the CIT's order withdrawing interest granted under section 214 of the Income Tax Act. It was held that the assessee, whose payment was accepted as an advance tax installment by the Department, was entitled to the interest on the excess amount paid. The Tribunal applied a precedent from a Bombay High Court case, emphasizing that adherence to the prescribed schedule was not necessary for claiming interest under section 214. Therefore, the assessee's entitlement to the interest was affirmed, and the CIT's decision was overturned.

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Issues: Appeal against order of CIT withdrawing interest granted under section 214 of the Income Tax Act.

Analysis:
The appeal was filed by the assessee against the CIT's order under section 263 of the IT Act, which withdrew the interest of Rs. 2,092 granted to the assessee under section 214. The contention of the assessee was that the ITO had given credit for advance tax paid, and the assessee was entitled to interest under section 214 on the excess amount paid. The Departmental representative argued that payments made after due dates cannot be considered as advance tax payments, citing a Board Circular. However, the Tribunal found that the payment made by the assessee had been accepted by the Department as an advance tax installment, making the assessee entitled to interest on the excess amount paid.

In a similar case before the Bombay High Court, it was held that even if a payment was made slightly beyond the prescribed date, if it was accepted by the Department as an advance tax installment, the assessee would be entitled to interest under section 214. The High Court rejected the argument that adherence to the prescribed schedule was necessary for claiming interest under section 214. The Tribunal's factual finding that the payment was accepted as an advance tax installment led to the conclusion that the assessee was entitled to interest, and no question of law arose. This precedent was applied to the present case, where the Department had accepted the payment as advance tax, as evident from the assessment order.

Therefore, the Tribunal held that the assessee was entitled to the interest under section 214 for the excess advance tax paid, and the CIT was not justified in withdrawing the interest. Consequently, the Tribunal allowed the appeal and canceled the CIT's order, affirming the entitlement of the assessee to the interest granted under section 214.

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