Judgment:
1. In this appeal, the substantial question of law which falls for consideration is:
'Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the appellant was not entitled to interest u/s. 214 of the Income-tax Act?'
2. Though the said question of law is very broadly worded and does not display the real controversy, the appeal has been entertained probably because of the following facts:
The assessee filed the estimates for the purpose of paying the advance tax under Section 209A(3),(4) and (5). It is obvious from the language of Section 214(1) that where the payments made by way of the instalments of the advance tax is more than the actual tax liability which is ultimately found out, the excess payment made by way of advance tax would carry interest at the rate of 15%. It is innate that for this, the assessee has to file an estimate of advance tax under Section 209A(3) or (4) of the Act. When we see the estimates in this case, it is clear that the amount of tax deducted at source was shown in column no. 6 at Rs. 9,24,000/- whereas the estimated gross income tax payable by way of instalment of the advance tax was only Rs. 8,45,460/-. Under such circumstances, there was no question of making any payment of the advance tax towards instalments. The assessee knew this well that the tax already deducted at source was much more than his actual tax liability. However, he only.. made an endorsement to the following effect: 'However, to avoid the risk of penalty proceedings we are paying advance-tax of Rs. 2,40,000/-.'
On this basis though the interest was awarded on this amount by the assessing authority, the appellate authority refused the said interest holding that the instalment was not paid in terms of and in accordance with the estimate which was filed under section 209A(3) or (4) or (5) of the Act. The Tribunal also upheld this contention in the appeal and dismissed the appeal filed on behalf of the assessee. The matter is now before us in this appeal.
3. We find that this question is completely covered by a judgment of this Court to which one of us (V.S. SIRUPURKAR, J) was a party, reported in 258 ITR 449 (EIMCO-KCP LTD. -vs- COMMISSIONER OF INCOME TAX). There, the same question fell for consideration because there also, the assessee had made the payment of advance tax which was not in accordance with the estimate under section 209A. A view was taken after considering the relevant sections in the following words:
'Section 209A provides for giving the estimate. Clause(a) of sub-section(1) of section 209A specifically provides that where the assessee has been previously assessed by way of regular assessment, he shall send to the Income-tax Officer a statement of advance tax payable by him computed in the manner laid down in clause (a) or in sub-clause (i) of clause (d) of sub-section (1) of section 209. The section further dictates that the assessee shall pay such amount of advance tax in a case falling under clause (a) as accords with the statement in equal instalments on the dates applicable in his case under section 211. It is to be seen that the section directs to pay the advance tax in equal instalments but that payment has to be in accordance with the statement made under clause (a). This shows that it is not as if the assessee has to pay any amount of tax. The tax which he pays must be as per the statement that he gives. . . '
4. Here obviously from the statement and more particularly from the contents of column 6, it was clear that there was no tax liability whatsoever. However, the assessee in order to avoid an imaginary penalty has chosen to pay Rs. 2,40,000/-. Such payment is obviously not in accordance with the estimate and therefore the matter is fully covered by the decision that we have showed above.
5. The Tribunal has correctly dismissed the appeal and confirmed the order of the Commissioner of Income Tax refusing to pay the interest. The appeal has no merits. It is dismissed. No costs.