COMMISSIONER OF INCOME TAX Vs. DEEPCHAND KISHANLAL

JUDGEMENT

(1.) THE question of law referred to us under the provisions of section 256(1) of the Income-tax Act, 1961 (hereinafter referred as "the Act"), is as under:

(2.) WHILE allowing the appeal filed by the assessee, the Commissioner of Income-tax (Appeals) directed the payment of interest on the excess advance tax under section 214 of the Act by computing the excess with reference to the revised order. The Appellate Tribunal, Bangalore Bench, affirmed this order, following the decision of the Calcutta High Court in Chloride India Ltd. (1977) 106 ITR 38 and other similar decisions. In this background, at the instance of the Revenue, the question was referred to us for an answer.

(3.) EARLIEST of the decisions, relevant to the question before us, is of the Bombay High Court in Sarangpur Cotton Manufacturing Co. Ltd. v. CIT [1957] 31 ITR 698 (referred to as Sarangpur case hereinafter). It was rendered in the year 1957 and arose out of section 18A of the Indian Income-tax Act, 1922 (referred as the 1922 Act, for short). Section 18A of the said Act provided for payment of interest up to "the date of assessment (hereinafter called the regular assessment) made under section 23... The dispute centred round the meaning of "regular assessment". Chagla C. J., speaking for the Bench, observed (at page 702):