- (1.) THE Income -tax Appellate Tribunal, Delhi, has referred the following question of law under Section 256(1) of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'), for the opinion of this court: Whether, on the facts and circumstances of the case and in accordance with the provisions of law, the Tribunal was justified in confirming the order of the Commissioner of Income -tax (Appeals) cancelling the levy of interest under Section 217(1A)?
(2.) THE reference relates to the assessment year 1973 -74. Briefly stated the facts giving rise of the present reference are as follows:
(3.) A demand of Rs. 29,88,105 was raised under Section 210 of the Act by the Department and the demand notice was served on June 9, 1972. The appellant -company paid up the entire demand in three equal instalments on June 15, 1972, September 15, 1972, and December 1, 1972. There was thus a proper compliance. It appears that the appellant -company considered itself liable to file a revised estimate under Section 212(3A) of the Act. Since the company had certain problems relating to its accounts and it had already sought extension of time from the Registrar of Companies, for holding its A.G.M., it submitted a petition to the Commissioner of Income -tax, Kanpur, on December 13, 1972, seeking extension of one month for revising the estimate by January 15, 1973. On the basis of its own accounts the appellant -company, however, made a further payment of Rs. 20,11,895 by way of advance tax on December 15, 1972. Thus, by the due date for payment of the last instalment, the appellant -company had already deposited Rs. 50 lakhs towards advance tax liability. On December 19, 1972, the appellant -company received acknowledgment from the Commissioner of Income -tax, Kanpur, who required Counsel to pay court fee. This was done by Counsel for the appellant -company on December 23, 1972. On January 15, 1973, the appellant -company filed an estimate of income of Rs. 96 lakhs on which the total tax payable worked out to Rs. 55 lakhs. The balance amount due Rs. 5.14 lakhs was also deposited by the appellant -company on January 15, 1973. Till this time, the appellant -company did not hear anything from the Commissioner of Income -tax, Kanpur, on its petition seeking extension of time by the month. It was on February 20, 1973, that the Commissioner of Income -tax, Kanpur, rejected the petition of the appellant -company under the provisions of the law. The reason for rejection of its petition was that the same did not lie with the Commissioner of Income -tax since the accounting year of the company had already expired. On March 31, 1973, the appellant -company paid a further sum of Rs. 5 lakhs towards advance tax on the basis of the financial picture emerging as a result of audit. Thus, the total tax paid (claimed by the appellant -company as advance tax) was Rs. 60.14 lakhs. The return of income was submitted by the appellant -company on November 30, 1973, on an income of Rs. 1,07,18,483. A sum of Rs. 6,76,000 was paid by way of self -assessment tax. The assessment was completed on December 31, 1975. The final assessed income amounted to Rs. 1,30,71,482. After giving credit for the prepaid taxes, further tax payable was determined at Rs. 8,58,779. Interest under Section 217(1A) of the Act was charged at Rs. 2,08,664. The appellant -company moved an application under Section 154 of the Act on May 17, 1982, for exclusion of interest under Section 217(1A) of the Act. On November 28, 1983, the same was rejected by the Inspecting Assistant Commissioner (Asstt.). This action was confirmed by the Commissioner of Income -tax (Appeals) on November 28, 1983. The Income -tax Appellate Tribunal apart from setting aside the matter to the Commissioner of Income -tax (Appeals) made advisory observation in regard to waiver of interest under Rule 40. On the basis of the same, the appellant -company moved waiver application on May 27, 1985. On September 5, 1988, the Deputy Commissioner (Asstt.) rejected the application for waiver of interest. On remand the Commissioner of Income -tax (Appeals) had deleted the levy of interest which order has been upheld by the Tribunal.;