Delhi High Court
Escorts Tractors Ltd. vs The Commissioner Of Income Tax on 26 August, 2010
Author: A.K.Sikri
* IN THE HIGH COURT OF DELHI AT NEW DELHI
ITR NO. 64 OF 1990
% Date of Decision: 26th August, 2010
Escorts Tractors Ltd. . . . Applicant
Through : Mr. R.M. Mehta, Advocate.
VERSUS
The Commissioner of Income Tax . . .Respondent
Through: Mr.Sanjeev Sabharwal, Sr.
Standing Counsel.
CORAM :-
THE HON'BLE MR. JUSTICE A.K. SIKRI
THE HON'BLE MS. JUSTICE REVA KHETRAPAL
1. Whether Reporters of Local newspapers may be allowed
to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J. (Oral)
Before we reproduce the question which is referred for our
opinion by the Tribunal on the application of the assessee preferred
under Section 256 (1) of the Income Tax Act, it is necessary to state
certain facts.
1. The assessee is a public limited company and its accounting
period for the assessment year 1980-81 ended on 31st December, 1979.
The assessee had deposited advance tax in three instalments i.e. on
14th June, 1979, 14th September, 1979 and 14th December, 1979. All
these three instalments were of ` 15,69,375/- each. However, in terms
of sub Section (4) of Section 209 A of the Act, the assessee wanted to
revise the estimate of its income. The last date for this purpose was
15th December, 1979. The assessee, however, moved a petition on
13.12.1979 to the Commissioner of Income Tax, Delhi-II seeking
extension of time for submitting the estimate of advance tax under
sub Section (4) of Section 209 A of the Act. Time was extended upto
31st January, 1980. The assessee filed an estimated tax on 28.1.1980
estimating to pay ` 5 lacs more by way of advance tax. This amount
was deposited on 29.1.1980. The assessee also filed return of income
for this assessment year declaring total income of `15,93,969/-. A
provisional assessment under Section 141A was made on the basis of
the aforesaid return on 30.12.1980. As per this, tax payable including
surcharge amount was determined as ` 9,40,829/-. As a consequence
thereof, an amount of ` 42,66,77/- which was deposited in excess as
advance tax became refundable. Interest on this was also to be
calculated under Section 214 of the Act. The total refund which was
worked out on this basis was ` 45,68,132/- which means a sum of `
3,01,336/- was component of the interest payable to the assessee.
3. Regular assessment was completed on 26.9.1983 which resulted
in further refund of ` 9,41,300/-. Interest under Section 214 on the
aforesaid amount was not paid to the assessee. It so happened while
computing the refund, the quantum of advance tax paid by the
assessee was taken by the department @ ` 52,08,125/- Which included
` 5 lacs paid on 29.1.1980 in terms of the revised estimate. In essence,
interest was not calculated on the said amount of ` 5 lacs under Section
214 of the Act. In these circumstances, the assessee filed rectification
application under Section 154 of the Act. On this application, the
Income Tax Officer passed an order dated 14.11.1983 rejecting the
request of the assessee to pay interest on the said amount of ` 5 lacs
as well. Primarily, two reasons were given for refusing the interest
which are as under:-
(i) The payment of Rs. 5 lacs was made after the due
date i.e. 15.12.1979 and for this reason it was not
treated as advance tax which could earn interest
under Section 214 of the Act;
(ii) The revised estimates filed by the assessee did not
exceed 33 and 1/3rd percent of the over more
amount. Therefore it could not be treated as
estimate under sub Section 4 of Section 209 A of the
Act and thus, the amount of Rs. 5 lacs paid
thereupon could not be treated as advance tax paid
under Section 207 and 213 of the Act. Additionally
the Income Tax officer also opined that since there
was two views prevalent as to whether this amount
should be treated as advance tax or not, therefore
interest was payable thereupon or not, application
of Section 164 for rectification was not maintainable
and the application dismissed on this ground also.
This order has been sustained by the CIT (A) as well
as Income Tax Appellate Tribunal.
4. As pointed out above, on the application of the assessee under
Section 256 of the Act, only one question is referred to this court for
opinion. Now we reproduce that question which reads as under;-
"Whether on the facts and in the circumstances of
the case the Appellate Tribunal erred in law in not
treating the additional instalment of advance tax
amounting to Rs. 5 lacs paid on 29.1.1980 with
the permission of the Commissioner of Income
tax, Delhi-II, New Delhi under Sec. 212 (3A) as
eligible to interest under Section 214 for excess
payment of advance tax made in accordance with
the schedule prescribed under sections 207 to 213
as laid down under sec. 214 of the Income-tax Act,
1961?"
5. Mr. Sabharwal, learned counsel appearing for the revenue has
submitted that any endeavour to go into this question on merit would
not serve any purpose even if it is answered in favour of the assessee
as the assessee cannot take any benefit therefrom. He has made this
submission pointing out that the reason given by the Assessing Officer
which is upheld by the higher authorities as well to the maintainability
of the application under Section 154 of the Act, has not been
questioned by the assessee and reference of that question has not
been sought or made. He thus submitted that when application under
Section 154 of the Act is held to be not maintainable, no purpose would
be served by answering these questions.
6. We are in agreement with the submissions of the learned counsel
for the revenue and, therefore, return the question answered, as it is
not going to serve any purpose either way.
(A.K. SIKRI)
JUDGE
(REVA KHETRAPAL)
JUDGE
AUGUST 26th, 2010
skb.
