A SETHUMADHAVAN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Ext. P4 dated 5-8-1977 passed by the Commissioner of Income Tax under S.264 of the Income Tax Act, 1961 is impugned by the petitioner. The Commissioner rejected the petitioner's claim for interest under S.214 of the Act in respect of the third instalment of advance tax paid by the petitioner on the ground that the instalment was paid subsequent to the due date.

(2.) In respect of the assessment year 1976-77 the petitioner was required to pay advance tax in terms of S.210 in three equal instalments at the rate of Rs. 6600/- on the due dates mentioned under S.211(ii), viz., 15th September, 15th December and 15th March. The first two instalments were paid by the petitioner on the due dates. On 13-3-1976 which was two days prior to the due date for payment of the third instalment the petitioner forwarded an estimate of his income together with a Demand Draft for Rs. 55,760/- being the balance advance tax payable by him on the basis of such estimate. The demand draft was admittedly received by the Department on 16-3-1976 which was a day later than the date on which the third instalment became due. For the reason that the third instalment was paid too late, the petitioner's claim for interest in respect of the amount paid towards the advance tax in excess of what was due as per the regular assessment was rejected by the Income Tax Officer. His decision was confirmed by the Commissioner by the impugned order Ext. P4.

(3.) Petitioner's counsel Shri. Vijayan Nair contends that interest in terms of S.214 of the Act is payable by the Government in respect of the excess amount paid by way of advance tax, even if such payment was made subsequent to the dates mentioned under S.211. Counsel states that where advance tax becomes payable on the basis of the estimate as mentioned under S.212(3A) the liability of the assessee is limited to sending the estimate before the due date provided the amount payable as per the estimate is remitted on or before 1st April. It is, however, not imperative, according to counsel, that the remittance should accompany the estimate on the due date. Counsel further submits that sub-s.(3A) of S.212 requires the assessee to send the estimate before the due date but it does not require him to assure himself that the estimate sent is received by the Department before the due date. Counsel therefore contends that so long as it is established that the estimate was sent by the assessee before the due date sub-s.(3A) of S.212 was in terms satisfied. I shall first read