ORDER
N. R. PRABHU, A.M. :
There are appeals by the assessee and gross appeals by the Department. These appeals are taken up together and disposed of by a common order for the sake of convenience.
2. We shall take the appeals by the assessee first for disposal. The grievance on these appeals is that the CIT(A) was in error in not granting interest under S. 214 of the IT Act, in respect of refund of excess advance tax paid by the assessee and arising as a result of the order passed by the ITO under S. 155(1) of the IT Act. We have heard the parties to the dispute. At the time of hearing, the counsel for the assessee has invited our attention to the decision of the Bombay High Court in the case of CIT vs. Tata Chemicals reported in (1988) 169 ITR 314 (Bom). That was a case where advance tax paid was not taken into account when passing the regular assessment order. When the matter was brought to the notice of the ITO an order under S. 154 was passed by the ITO. As a result of this order, it was found that the assessee had paid advance tax in excess of tax payable by it and the same had to be refunded. However, no interest was granted by the Assessing Officer. In reference, High Court held that the assessee would be entitled to interest on refund of advance tax under S. 214 of the IT Act. The High Court in this connection referred to the Circular Instruction No. 947 dt. 23rd April, 1976 issued by the CBDT. In the said circular, the CBDT has advised the Field Officers that the assessee would be entitled to interest under S. 214 of the IT Act, on the amount refundable to him by virtue of order of rectification. The circular also stated that the interest was admissible till the date of regular assessment. Only as this terminus could not be changed merely because the income assessed had undergone a change as a result of appeal or revision. However, there was no reference in the circular to an alteration by reason of rectification. In view of the circular, the Court held that the assessee would be entitled not only to interest on the amount required to be refunded by a reason or a order of rectification, but it would also be entitled to such interest upto the date of order of the rectification. This is not withstanding the fact, that the legal position was different, the Court added beneficial circular would be binding on the Field Officer. It is no doubt true that in this case the excess amount refunded was as a result of an order passed by the ITO under the provisions of S. 155(1) of the IT Act, but that to our mind should not make any difference. Under the scheme of the Act the provision of S. 154 are no in any way materially different from the provisions of S. 155(1), and this has been made abundantly clear in S. 155(1) itself, wherein, it has been held that the Assessing Officer can amend the order of assessment with a view to including correct share of income, and the provisions of S. 154 shall, so far as may be, apply thereto, in the light of this discussion, we are of the opinion that claim of the assessee is well founded and in that view direct the ITO to allow interest on the excess advance tax refunded by reason of the order under S. 155(1).
3. That takes us to the appeals filed by the Department. These are appeals against the order of the CIT(A) directing the ITO to grant interest under S. 244(1A) from the date on which the advance tax was adjusted against the demand to the date of payment of the refund. Here again, we have heard the parties to the dispute. We are of the view that the order passed by the CIT(A) has to be reversed. The provisions of S. 244(1A) requires the ITO to grant interest on refund arising as a result of any amount having been paid by the assessee in pursuance of an order of assessment and such amount or any part thereof having been found in appeal or other proceeding under the Act to be in excess of the amount which such assessee was liable to pay as tax. The essential ingredient of the section can be summarised. (i) The assessee should have paid the amount in pursuance of an order of assessment (ii) Such amount or part thereof was found to have been paid in excess as a result of an order in appeal or other proceeding and the amount or a part thereof had become refundable.
4. The question to be considered in this case is whether, the advance tax paid by the assessee could be considered as a payment made in pursuance to an order of assessment or not. For this purpose, it may be necessary for us to advert to S. 219 of the IT Act, which talks of credit for advance tax. This section clearly says that any advance tax paid under Chapter XIV (sic) of the IT Act is to be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the assessment year next following the financial year in which it was payable, and credit thereof should be given to the assessee in the regular assessment. The section does not authorise the Assessing Officer to treat the advance tax payment as a payment in pursuance of an order of assessment passed by him. It only requires that the same is to be treated as a tax on income of the previous year and credits is to be given on completion of regular assessment. In this connection it would be profitable to look at the provisions of S. 140A. Under that section the ITO is to regard the self-assessment tax as a payment towards regular assessment. The advance tax and self-assessment tax are both in the nature of pre-paid taxes. While in the case of advance tax, credit is required to be given after treating the same as payment towards income of the previous year, in the case of self-assessment tax, the amount paid to be deemed as having been paid towards such regular assessments. Thus, the statute requires that different treatment be given to advance tax payment and self-assessment tax payment, though, both are payments in the pre-assessment stage. We are aware of the fact that there are decisions in support of the view canvassed by the assessees before us. We may in this connection refer to the decision of Delhi High Court in National Agrl. Co-operative Marketing Federation of India Ltd. vs. Union of India & Ors. reported in (1981) 130 ITR 928 (Del). There is also a decision of Punjab High Court which lends support to the arguments advanced by the assessee, but the Gujarat High Court decision in Bardolia Textiles Mills Ltd. vs. ITO reported in (1985) 151 ITR 389 (Guj) (FB) has taken a contrary view. In the said decision take Court has taken a view that S. 244(1A) does not apply to the amount paid as advance-tax and it applies only to amount paid in pursuance of an order of assessment or penalty, and further advance-tax paid was not an amount paid in pursuance of an order of assessment or penalty. When there is a conflict of judicial decisions and there is no decision of the jurisdictional High Court to guide the Tribunal, the best aid for interpretation could only be the statute which as observed earlier only requires the ITO to treat the advance-tax paid as the payment towards the income of the previous year and which is to given credit to after completion of the assessment. There is no requirement, express or implicit that such payment has to be treated as payment in pursuance of an order of assessment. In view of this, we shall hold that the CIT(A) was not justified in directing the ITO to grant relief under the provisions of S. 244(1A) on the excess advance-tax paid by the assessee and found to be refundable. As a result, the CIT(A) orders are reversed.
5. In the result, the appeals by the assessee and by the Department are allowed.