1994 (1) TMI 33

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.... in dispute that 15 per cent. would be payable on the excess tax paid from April 1, 1988, until payment. This clearly follows from section 214 of the Income-tax Act. The question of rate and payment of interest formed the subject-matter of later further legislation and section 244A has now been inserted with effect from April 1, 1989. Since I do not want to dwell upon section 244A any more hereafter, it is my opinion that the treatment there at par of advance tax paid and of tax treated as paid in regard to deductions at source, is not modificatory but merely declaratory of the law, for, as will be clear from what is stated a whole and correct reading of the Act shows that they were already at par, for purposes like those mentioned in se....

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....tax deduction at source mentioned, inter alia, in section 194C of the said Act. Thus it has been contended that this advance payment is on a separate footing than direct payment of advance tax by an assessee himself. Being on a different footing the claim for refund is to be made by the assessee for any excess deduction at source in accordance with the provisions of Chapter XIX containing the sections regarding refund and an application for refund is called for. In my opinion, the contention of the respondents is unsound. Under section 199 of the Act it is quite clear that the credit for tax deducted is to be given to the contractor whose bills have been deducted from, as if the deduction had been made and the deducted sum had been paid ....

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....ted at source ranks pari passu with self-paid advance tax, and can, therefore, be used for pro tanto diminution of the assessee's liability to pay advance tax. On the express words of section 214 I find no exclusion of its applicability to excess deduction made at source and paid to the Central Government. On a purposive construction of the said statute also it appears to me to be quite reasonable to construe the same to apply to deductions made at source. The Central Government gets the benefit of advance tax as well as tax deducted at source at the same time, i.e., during the financial year which is yet to be under assessment. Thus, if the Government is to pay 15 per cent. simple interest on excess amounts of which it has had the be....