TaxTMI 
TaxTMI 
1981 (3) TMI 71
X X X X Extracts X X X X
X X X X Extracts X X X X
....ps. The tax assessed was duly paid by the respective owners of the ships concerned. Later, the owners of the ships demanded a regular assessment under s. 172, cl. (7) of the I.T. Act, after filing returns of income during the accounting years. The ITO thereupon passed orders making regular assessment and on such assessment it was found that the tax paid on the basis of the summary assessment was in excess of the tax due on regular assessment under s. 172(7) of the Act and that the assessees are entitled to a refund of the excess amount paid. There was, however, no order for payment of interest on the amounts to be refunded to the assessees. The assessees objected to the assessment and appealed to the AAC, Ernakulam. In appeal, the assessees claimed also interest under s. 214 of the Act on the excess amount paid on summary assessment under s. 172(4) of the Act. The AAC reduced the total assessable income in all these cases and gave a direction to the ITO to consider the assessees claim for the benefit of 50% deduction of the tax payable in accordance with art. VI of the agreement between the Government of India and the Norwegian Government. The assessees' claim for interest on the e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g that previous year shall be treated as a payment in advance of the tax leviable for that assessment year, and the difference between the sum so paid and the amount of tax found payable by him on such assessment shall be paid by him or refunded to him, as the case may be. " In these cases, the tax paid on summary assessment under s. 172(4) of the Act is found to be in excess of the amount of tax payable on regular assessment as provided for in sub-s. (7) of s. 172. The payment so made in excess, according to sub-s. (7), " shall be treated as a payment in advance of the tax leviable for that assessment year ". Sub-s. (1) of s. 214, as it stood at the relevant time, is as follows " 214. Interest Payable by Government.-(1) The Central Government shall pay simple interest at nine 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 tax determined on regular assessment, 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d s. 219 states that any sum paid or recovered as advance tax shall be treated as payment of tax in respect of the income of the period concerned. The question for consideration in these cases relates to the interpretation of the expression in s. 172, cl. (7), that " any payment made under this section in respect of the passengers, livestock, mail or goods shipped at Indian ports during that previous year shall be treated as a payment in advance of the tax leviable for that assessment year ", and whether such payment can be treated as payment of advance tax within the meaning of s. 214 of the I.T. Act. Section 207 states that tax shall be payable in advance in accordance with the provisions of ss. 208 to 219 and such tax payable in advance is referred to as the advance tax. Interest is payable on the advance tax paid as provided for under s. 214 of the Act. Section 172, cl. (7), has treated the payment under the section as payment in advance of the tax leviable for the assessment year. From these expressions, it is contended by the learned counsel for the assessees that the tax paid under s. 172 is to be treated as advance tax paid. The learned counsel relies on the oftquoted dic....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Sections 208 to 219 referred to above relate to the liability, computation, estimation of income, etc., for payment of tax in advance before assessment, and provide also for payment of interest by the Central Govt. or the assessee, as the case may be, on the difference between the tax paid in advance and the tax payable on regular assessment. The learned counsel for the revenue relies on the decision of the Gujarat High Court in Bharat Textile Works v. ITO [1978] 114 ITR 28. The question, in that case, was whether the assessees who had paid advance tax long after the due dates for payment of instalments but in the same assessment year, are liable to pay penal interest under s. 217(1A) read with s. 215 of the Act, and in that context, the Gujarat High Court observed at page 31 : " Sections 207 to 219 (both inclusive) deal with 'advance payment of tax'. Section 207 provides that tax shall be payable in advance in accordance with the provisions of sections 208 to 219 in the case of income other than income chargeable under the head 'Capital gains'. Such income is thereafter in the chapter concerned referred to as ' income subject to advance tax' and the tax thereafter referred to a....