- (1.) 1. The business of the applicant-company is to make, hold and manage investments. In India, the business of the company constituted holding of shares and debentures in an Indian company. The applicant sold its shares and debentures of the said company in India in January, 1994, and earned the following income under the heads : Capital gains xx,xx,xx,xxx ; Dividend xx,xx,xx,xxx and Interest xx,xx,xxx (Total Rs. 28 crores). On account of these transactions, the applicant washable to pay advance tax amounting to xx,xx,xx,xxx on or before March 15, 1994. The applicant has stated that it issued instructions to its chartered accountants to pay the advance tax before March 15, 1994, and sent a cheque bearing the date of March 10, 1994, for advance tax xx,xx,xx,xxx drawn on Bank of XYZ, Bombay, and made payable to ABC Bank, Bombay. It is stated, however, that the cheque was received by the applicant's chartered accountants on March 15, 1994, who deposited it with the ABC Bank, Main Branch, with the income-tax challan, on the same date. Thereafter, a messenger of the applicant's chartered accountants is said to have visited the main branch of the ABC on March 30, 1994, for collecting the challan when he was told that the challan was not ready. Another messenger visited ABC on April 6, 1994, when he was informed that the cheque had been returned unpaid by the XYZ, Bombay. Thereupon, a higher employee of the chartered accountants visited the bank and was told that the cheque had been returned with the endorsement : "Advice not received. Please present after two days". The
(2.) chartered accountant's representative was told that the ABC was not obliged, nor was it their practice, to represent unpaid cheques. Therefore, the returned cheque and the accompanying challan were returned to the chartered accountants' representative on April 7, 1994. It is stated that a representative of the applicant's chartered accountants contacted the XYZ, Bombay, on April 7, 1994, to ascertain whether they could contact the ABC and persuade them to represent the cheques. He was told that it was not possible. On April 7, he collected the cheque from the ABC, Bombay. Efforts were made again on April 12 and 13, to persuade the ABC to re-present the cheque, but the ABC informed them that it was not their practice to re-present dishonoured cheques and that they would require fresh challans, etc., if the amount is to be paid in again. It is also stated that there were some discussions between the officials of the ABC and XYZ, Bombay, and the Deputy Controller of Accounts, Central Board of Direct Taxes (CBDT). Then it was decided that the ABC's procedure has to be followed and only a representation could be made to the concerned Commissioner of Income-tax for redressal, if any. Thereafter, the applicant presented the returned cheque together with a fresh challan to the ABC on April 15, 1994. This fact is not in K's affidavit. So, it is set out later. These facts have been stated in an affidavit of Mr. K., an employee of the chartered accountants of the applicant, acting under authorisation from the applicant. The cheque was honoured by XYZ on its presentation the next day and a receipted challan dated April 16, 1994, was issued to the applicant.
(3.) LATER, the applicant made an application before the Commissioner of Income-tax on April 18, 1994, requesting him to "confirm" that the applicants are not liable to pay any interest in terms of Section 234B and/or Section 234C of the Income-tax Act, 1961 ("the Act"). The Commissioner of Income-tax intimated the chartered accountants , vide his letter dated April 20, 1994, that there is no provision in the Income-tax Act to treat the payment made after the end of the relevant financial year as advance tax payment before March 31. Therefore, the provisions regarding charge of interest would squarely be applicable. After receipt of this letter, the applicant filed this application before us on November 10, 1994, seeking advance ruling on the following question :

" Whether the applicant is liable to interest under Sections 234B and 234C in respect of tax of xxx.xxx,xxx.xx paid vide cheque No. xxxxx xxxxx dated March 10, 1994."

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