Court denies interest on late tax payment, rejects rectification application, finding it non-maintainable.

The court upheld the decision to deny interest under Section 214 on an additional advance tax payment made after the due date, as it did not exceed the prescribed limit for revised estimates under Section 209A. The court found that addressing the issue of interest calculation would be futile due to the non-maintainability of the rectification application under Section 154, which had been rejected by the Income Tax Officer and not challenged by the assessee. The court returned the question unanswered, as it would not impact the case outcome.

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Issues: Refund of excess advance tax, Calculation of interest under Section 214, Maintainability of rectification application under Section 154.

Refund of Excess Advance Tax: The case involved a public limited company that deposited advance tax in three installments for the assessment year 1980-81. The company revised its income estimate and deposited an additional amount of Rs. 5 lakhs as advance tax. A provisional assessment was made, resulting in a refund of the excess amount deposited. However, during the regular assessment, the department did not calculate interest under Section 214 on the additional amount of Rs. 5 lakhs paid after the due date. The Income Tax Officer rejected the request for interest, stating that the payment was made after the due date and did not exceed the prescribed limit for revised estimates under Section 209A. The CIT (A) and Income Tax Appellate Tribunal upheld this decision.

Calculation of Interest under Section 214: The main contention was whether the additional installment of advance tax amounting to Rs. 5 lakhs, paid with the Commissioner's permission after the due date, was eligible for interest under Section 214 for excess payment of advance tax. The question referred to the court focused on this issue. The revenue's counsel argued that addressing this question would be futile since the Assessing Officer's reasoning for rejecting the rectification application under Section 154 had not been challenged by the assessee. Consequently, the court agreed with the revenue's submission and returned the question unanswered, as it would not serve any purpose due to the application's non-maintainability.

Maintainability of Rectification Application under Section 154: The Income Tax Officer had rejected the rectification application under Section 154, citing reasons related to the timing of the additional payment and the compliance with the prescribed limits for revised estimates. The revenue's counsel contended that since the application's maintainability was in question and had not been challenged by the assessee, addressing the substantive issue of interest calculation under Section 214 would be inconsequential. The court concurred with this argument and decided not to answer the question referred, as it would not impact the outcome of the case given the non-maintainability of the rectification application.

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