1986 (10) TMI 15

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....This is a reference under section 256(1) of the Income-tax Act, 1961 (for short " the Act "), for answering the following question of law: " Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the assessee was entitled to interest under section 214 of the Income-tax Act, 1961, treating the payment of Rs. 11 lakhs paid by the assessee after the finan....

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.... this court in that writ petition directing the assessee to furnish a bank guarantee for the remaining amount which was done by the assessee. The writ petition was ultimately dismissed by this court and the assessee then went in appeal to the Supreme Court. The Supreme Court by an order dated October 6/8, 1965, permitted the assessee to pay a sum of Rs. 11 lakhs in cash towards the advance tax wit....

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....the assessee's contention and held that the assessee was entitled to interest with effect from April 1, 1966, and not with effect from April 1, 1965, as claimed by him under section 214 of the Act. This conclusion was reached on the ground that the amount of Rs. 11 lakhs paid by the assessee in November, 1965, must be deemed to be a payment towards advance tax by virtue of the aforesaid stay order....

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....ng the payment of the advance tax. Admittedly, the Revenue did not treat the assessee to be a defaulter for non-payment of this amount of advance tax within the relevant financial year for this very reason. There is no doubt that the nature of the amount in deposit must be the same for all purposes and not merely for the purpose of not treating the assessee to be a defaulter. We are, therefore, un....