TaxTMI 
TaxTMI 
2012 (8) TMI 740
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.... in the present case is :- What is the character of Tax Deductible at Source (TDS)/Advance Tax under the Income Tax Act, 1961? Advance Tax is leviable in the very year in which income accrues or arises. It is normally paid in three instalments . A similar situation arises in the case of TDS. It is Tax Deductible at Source which is also called as `Withholding Tax' under Section 195 of the Income Tax Act, 1961 ['Act', for short]. Broadly, both Advance Tax as well as TDS are based on estimation of income by the assessee . The question which arises in this case is, whether interest is payable by the Revenue to the assessee if the aggregate of instalments of Advance Tax/TDS paid exceeds the assessed tax? This controversy arises in a ....
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....equity. It was also ordered to be paid on the basis of Article 265 of the Constitution. We have serious doubts about the correctness of the judgement in Sandvik Asia [supra]. In our view, the judgement of this Court in the case of Modi Industries Limited vs. Commissioner of Income Tax, 1995 (6) S.C.C . 396 correctly holds that Advance Tax or TDS loses its identity as soon as it is adjusted against the liability created by the Assessment Order and becomes tax paid pursuant to the Assessment Order. If Advance Tax or TDS loses its identity and becomes tax paid on the passing of the Assessment Order, then, is the assessee not entitled to interest under the relevant provisions of the Act? In this connection, we may refer to the provisions of ....
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....the net amount payable under such agreement or arrangement. 214. (1) The Central Government shall pay simple interest at fifteen per cent per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under sections 207 to 213 exceeds the amount of the assessed tax from the 1st day of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment is paid after the expiry of the financial year during which it is payable by reason of the provisions of section 213, interest as aforesaid shall also be payable on that instalment from the date of ....
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.... it was payable, and credit therefor shall be given to the assessee in the regular assessment: Provided that where, before the completion of the regular assessment, a provisional assessment is made under section 141A , the credit shall be given also in such provisional assessment. 237. If any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess. 243 .(1) If the Assessing Officer does not grant the refund, -- [a] in any case where the total income of the assessee does not consist solely of income....
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....Government shall pay to the assessee simple interest at fifteen per cent per annum on the amount of refund due from the date immediately following the expiry of the period of three months aforesaid to the date on which the refund is granted. [1A] Where the whole or any part of the refund referred to in sub-section (1) is due to the assessee , as a result of any amount having been paid by him after the 31st day of March, 1975, in pursuance of any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act to be in excess of the amount which such assessee is liable to pay as tax or penalty, as the case may be, under this Act, the Central Government shall pay to such asse....