EIMCO KCP LIMITED Vs. COMMISSONER OF INCOME TAX

JUDGEMENT

(1.) TWO questions are referred to us at the instance of the assessee and under the directions of this Court. They are :

(2.) THE assessment year is 1979 80. The assessee, who was liable to pay the advance tax, filed an estimate on 13th Sept., 1978. The assessee estimated the payable amount of Rs. 14,18,506 and made the payment of Rs. 4,75,000 on 15th Sept., 1978. It made another payment of Rs. 5,60,000 by way of second instalment on 15th Dec., 1978. The assessee then filed a revised estimate in the month of March, i.e., before the third and final instalment on 13th March, 1979, wherein the assessee had estimated the advance tax payable at Rs. 21,80,000. However, instead of paying the amount to complete the payment of Rs. 21,80,000, i.e., Rs. 11,45,000, the assessee had made the payment of Rs. 12,00,000, which was in excess of the required payment by Rs. 55,000. This was on 14th March, 1979. Thus instead of Rs. 21,80,000 which was the estimated tax, the assessee paid Rs. 22,35,000. The assessment was completed and a total income of Rs. 35,30,820 and the tax was determined at Rs. 20,39,049. As per that the excess tax paid would have been Rs. 1,95,951. Any excess amount paid by way of advance tax carries interest under S. 214 of the IT Act (in short the Act). However, the assessing authority did not grant interest on the total amount of Rs. 1,95,951 and instead took a view that the amount on which the interest was liable to be paid should be calculated as under :

(3.) LEARNED counsel for the assessee then drew our attention to the judgment of this Court in CIT vs. T.T. Investments & Traders (P) Ltd. (1984) 42 CTR (Mad) 48 : (1984) 148 ITR 347 (Mad) : TC 4R.571 and relied on the observations in that judgment to the effect that any payment made before the end of the accounting year in which the assessment to be made should be taken to be the advance tax. In out view, the decision cannot apply as the question was whether an instalment of advance tax paid beyond the date as contemplated by S. 211 could still be deemed to be advance tax. Therefore, the question there was of the nature of the tax paid and not its payability. We are on entirely different question. Here though the assessee has shown as per its estimate the payable instalments correctly, it had made excess payment and that excess payment be deemed to be the advance tax. In the present situation, we are of the opinion that the excess payment which was not in accord with the estimate sent by the assessee could not be deemed to be the advance tax. In our opinion, the decision is of no help to the assessee particularly because it entirely differs on facts. It will be also seen that the statement of advance tax, or as the case may be, the estimate has to be made under Form 28A. This was correctly shown by the assessee. The assessee, however, paid the tax not in accord with the estimate but in excess thereof. Hence, the assessee could not be said to be entitled to earn interest on that excess amount.