Per Shri Egbert Singh, Accountant Member - [Paras 1 to 6 are not reproduced here as they involve minor issues.]
7. We shall now come to the cross-objections as filed by the assessee in which the only point raised was regarding the charging of interest under section 215 of the Income-tax Act, 1961 (the Act). According to the assessee there was not shortfall of payment of advance tax particularly after giving effect to the appellate order under section 251 of the Act which was at Rs. 74,959. The tax worked out to Rs. 27,971 and after considering the tax deducted at source the tax payable was at Rs. 26,651 and 75 per cent thereof worked out to Rs. 19,289. The advance tax paid was shown at Rs. 22,500. It is urged, therefore, that since there was no tax payable the question of paying interest under section 215 did not arise.
8. On behalf of the revenue the learned departmental representative supports the order of the AAC who found that the assessee paid advance tax which was less than 75 per cent of the assessed tax. It is urged that the cross-objections may be dismissed.
9. We have urged both the sides and we have taken into account the facts of the case. Section 215 refers to the assessed tax and if payment of advance tax was less than 75 per cent of the assessed tax, the assessee would be liable to interest from the 1st April of the following financial year up to the date of regular assessment. We find that similar provision exists in section 214 of the Act, which was the subject-matter before the Honble Madras High Court in the case of the Rayon Traders (P.) Ltd. v. ITO : 126ITR135(Mad) in which it was held that the order passed by the ITO for giving effect to the order of the AAC is an order under section 143 of the Act and, therefore, a regular assessment. In this decision, the Honble High Court has taken note of the decision of the Honble Calcutta High Court in the case of Chloride India Ltd. v. CIT : 106ITR38(Cal) , in which a similar situation has arisen. On the ratio enunciated in the decisions of the above cases, the order of the ITO giving effect to the appellate order it also a regular assessment order under section 143. That being the position, the amount of the total income computed after giving effect to the order of the AAC should be the basis for ascertaining assessed tax for the purpose of levy of interest under section 215, on the facts of the present case. In this view of the matter we find that there is considerable force in the submission made on behalf of the assessee. On the facts of the case, as stated in the proceeding paragraphs, there was no shortfall of payment of advance tax for the year under consideration and accordingly, interest under section 215 was not leviable. Therefore, the orders of the authorities below on the point are cancelled and the appeal by the assessee is allowed.
10. In the result, the appeal by the revenue is dismissed and the cross-objections of the assessee are allowed.