COMMISSIONER OF INCOME TAX Vs. BHARAT MOTORS SERVICE

JUDGEMENT

(1.) UNDER section 256(1) of the Income-tax Act, 1961 (herein after referred to as "the Act"), the Income-tax Appellate Tribunal, Bangalore Bench, has referred the following two questions :

(2.) THE respondent is a firm. In respect of the assessment year 1975-76, the assessee paid the second instalment of advance tax by way of cheque dated September 13, 1974, which was encashed by the Income-tax Officer only on September 25, 1974. While framing the assessment for the year under reference, the Income-tax Officer did not determine the interest payable by the Department to the assessee as contemplated under section 214 of the Act.

(3.) SO far as the first question is concerned, a similar question came up for consideration before this court in CIT v. P. V. S. Beedies (P) Ltd. (ITRC Nos. 199 and 200 of 1982 dated November 11, 1983) [1987] 163 ITR 846). There, this court following the judgment of the Supreme Court in CIT v. Ogale Glass Works (P) Ltd. [1954] 25 ITR 529, held that payment by cheque relates back to the date of delivery of the cheque.