B.S. Dhillon, J.
1. The assessee is a private limited company. For the assessment year 1967-68, a notice of demand under Section 210 of the I.T. Act, 1961 (hereinafter referred to as ' the Act '), was issued on 12th July, 1966, requiring the assessee to pay advance tax of Rs. 97,930. The assessee paid l/3rd of this amount, i.e., Rs. 32,644, on 23rd September, 1966. Thereafter, a revised notice of demand under Section 210 of the Act was issued on 16th October, 1966, requiring the assessee to pay Rs. 88,116 less a sum of Rs. 32,644 already paid. The assessee thereafter paid Rs. 16,322 on 22nd October, 1966 ; Rs. 16,322 on 27th December, 1966, and Rs. 11,414 on 26th January, 1967. The assessee further gave cheques of Rs. 20,000 and Rs. 10,000 to the ITO on 20th March, 1967, and 23rd March, 1967. These two cheques were not sent for collection by the ITO in the month of March, 1967, but were sent for collection in April, 1967, which were actually encashed on 15th April, 1967. A further amount of Rs. 14,058 was due to the assessee as a result of the order of the AAC for the assessment year 1964-65, and this amount was adjusted against the outstanding advance tax payment on 27th June, 1967. On the completion of the regular assessment, under Section 143(3) of the Act, on 22nd August, 1968, tax was determined at Rs. 1,06,828 and a refund of Rs. 13,932 was allowed to the assessee. No interest under Section 214 of the Act on Rs. 13,932 was allowed. The assessee thereafter made an application under Section 154 of the Act, pleading that interest should be allowed on Rs. 13,932 from 1st April, 1967, to 22nd August, 1968. This application was rejected by the ITO because the advance tax paid was Rs. 1,06,702 and this figure was not more than the tax demanded at Rs. 1,06,828 on regular assessment. Rs. 14,058 was not considered to be a payment of advance tax.
2. Being aggrieved, the assessee filed an appeal to the AAC and pleaded that the handing over of the cheques of Rs. 20,000 and Rs. 10,000 on 20th March, 1967, and 23rd March, 1967, would tantamount to payment and the ITO was, therefore, not justified in taking the view that the payment of the amounts covered by these two cheques was made on 15th April, 1967, i.e., the date on which the cheques were encashed. The AAC observed that the point whether the date of payment was the date on which the said cheques were encashed, was a matter which was not free from doubt and he, therefore, observed that there was no mistake apparent from record.
3. The assessee filed second appeal before the Tribunal. The Tribunal held that the receipt of cheques of Rs. 20,000 and Rs. 10,000 by the ITO on 20th March, 1967, and 23rd March, 1967, constituted payment on the said dates under Section 210 of the Act. Along with these payments of the sums of Rs. 20,000 and Rs. 10,000 and that of Rs. 76,702 made between 23rd September, 1966, to 26th January, 1967, the total payment under Section 210 of the Act amounted to Rs. 1,06,702. The Tribunal held that against the total demand of tax determined on regular assessment at Rs. 1,06,828 the assessee had paid Rs. 1,06,702. It was, therefore, held that advance tax paid on the regular assessment did not exceed the amount of tax determined at the regular assessment and that the assessee was not entitled to any interest under Section 214 of the Act. However the Tribunal further held that since in appeal the final figure of tax was determined at Rs. 87,822 and as the assessee had paid Rs. 1,06,702, he was entitled to interest on an amount of Rs. 18,880 under Section 214 of the Act.
4. On the applications of the revenue, the Tribunal has sent for the opinion of this court on the following questions of law :
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the two cheques of Rs. 20,000 and Rs. 10,000 which were handed over by the assessee to the Income-tax Officer on March 20, 1967, and March 23, 1967, respectively, constituted valid payment under Section 210 of the Income-tax Act though they were actually encashed on April 15, 1967, i.e., after the end of the financial year 1966-67 ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the interest should be allowed to the assessee on the amount of Rs. 18,880 under Section 210 of the Act '
5. There is no representation on behalf of the assessee.
6. After hearing the learned counsel for the revenue and going through the record of the case, we are of the view that the first question has to bo answered against the revenue and in favour of the assessee. Mr. Awasthy,the learned counsel for the revenue, could not show us anything to hold that when the assessee handed over the two cheques to the ITO on 20th March, 1967, and 23rd March, 1967, respectively, the tax should not be considered to have been paid. If the ITO had sent the cheques for encashment on the date of receipt of the cheques the amount would have been received immediately thereafter. Admittedly, the ITO did not send the cheques for encashment till 15th April, 1967, on which date they were actually encashed. The assessee cannot be held to be liable for non-payment of the amount in time when he handed over the cheques to the ITO who failed to encash the same forthwith. We have, therefore, no reason to take a different view than the one taken by the Tribunal and, thus, this question is answered in the affirmative.
7. As regards question No. 2, we are of the opinion that this question has to be answered in favour of the revenue and against the assessee. We have very carefully perused Section 214 of the Act and find that the said provision deals with payment of interest on the excess amount paid by way of advance tax for the period from the 1st day of April next following the financial year during which the advance tax was due to the date of regular assessment. This section nowhere deals with the question of grant of interest to an assessee if the quantum of tax is reduced in appeal. In the present case, admittedly, the assessee had deposited advance tax of Rs. 1,06,702 against the demand of Rs. 1,06,828, which figure was arrived at during the regular assessment. 'Regular assessment' has been defined in Section 2, Sub-section (10) of the Act. It is thus apparent that the provisions of Section 214 of the Act deal with the grant of interest for the period from 1st April next following the financial year during which the tax was paid up to the date of regular assessment and for no other period. In the present case, the assessee did not pay advance tax more than what was determined to be payable at the regular assessment. It would, therefore, be apparent that the provisions of Section 214 of the Act will not entitle the assessee to get interest on an amount of Rs. 18,880, which amount became returnable in view of the reduction of tax in quantum in appeal. The second question is, therefore, answered in the negative, against the assessee and in favour of the revenue. No costs.