Ramachandra Raju, J.
1. Section 214 of the I.T. Act in its material portion reads as under :
"The Central Government shall pay simple interest at twelve per cent. per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under Sections 207 to 213 exceeds the amount of the tax determined on regular assessment, from the 1st day of April next following the said financial year to the date of the regular assessment for the assessment year immediately following the said financial year....."
2. The main question posed for determination is whether such interest is payable to the assessee on the excess amounts paid during the financial year on dates subsequent to the dates fixed under Section 211 of the I.T. Act for payment of such instalments.
3. Sri Y. V. Anjaneyulu, the learned counsel appearing for the assessee, contends that if such excess amount was paid during the financial year, interest is payable to the assessee. Sri P. Rama Rao, the learned counsel appearing for the revenue, contends that the excess amount does not earn interest when once the instalments were paid on dates subsequent to the dates fixed for payment of the instalments and it should be so because when the assessee failed to pay the instalments of advance tax by the due dates fixed under Section 211 of the I.T. Act, he is deemed to be an assessee in default in respect of such instalment or instalments incurring the risk of payment of penalty under Section 221 of the I.T. Act.
4. The petitioner-company is an income-tax assessee. We are concerned with the financial year 1974-75. The accounting year of the company is from April, 1974, to March 31, 1975. The respondent by his order dated August 16, 1974, under Section 210(1) of the I.T. Act directed the petitioner to pay Rs. 5,254 as advance tax. Under Section 211 of the Act, the advance tax is payable in 3 equal instalments, the due dates being September 15, 1974, December 15, 1974, and March 15, 1975. The petitioner paid Rs. 1,752 on September 13, 1974, and Rs. 1,751 on December 16, 1974. On March 14, 1975, the petitioner gave a revised estimate of advance tax payable by him at Rs. 2,10,003. The balance amount of Rs. 2,06,500 was payable as the last instalment of advance tax by March 15, 1975. The petitioner, however, paid Rs. 1,06,500 on March 25, 1975, and the balance amount of Rs. 1,00,000 on March 29, 1975. It is thus clear that though the petitioner paid the entire advance tax during the financial year 1974-75, it had not paid the second and third instalments on the due dates, viz., December 15, 1974, and March 15, 1975. The regular assessment of the company for the financial year 1974-75 was made on January 20, 1976, and the tax payable was determined at Rs. 62,908. Refund of excess of Rs. 1,47,095 was given to the petitioner. The petitioner by a letter dated April 19, 1976, addressed to the respondent claimed interest on this amount. The respondent by his reply dated July 26, 1976, informed the petitioner that the claim is not admissible.
5. After hearing the contentions urged by the learned counsel appearing for the assessee and the revenue, we are inclined to agree with the contention urged by Sri P. Rama Rao. According to us, the assessee can claim interest under Section 214 of the Act only if he has complied with the requirement specified under Section 211 of the Act. A careful reading of Section 214 of the Act will indicate that the stress is not on the question whether all the instalments of advance tax were paid during the financial year, but the stress is that the instalments must have been paid before the due dates fixed for payment if the assessee was to be given the right to claim interest under Section 214 of the I.T. Act. Section 314 of the I.T. Act has to be read along with Section 218 of the Act. Under Section 218 of the I.T. Act, if the instalment of advance tax was not paid by the specified date, the assessee shall be deemed to be an assessee in default in respect of such instalment and the revenue is given the right to impose penal'ty on such assessee for not paying the instalment before the due date. It is not disputed that the department could have proceeded against the petitioner and levied the penalty for the delay. But Sri Y. V. Anjaneyulu, the learned counsel for the petitioner, contends that the right of the revenue to impose penalty for the delay has nothing to do with the right of the assessee to claim interest on the excess payments made by him as advance tax and that even if the revenue had such a right, the petitioner is entitled to interest from April 1, 1975, as bsfore any penalty proceedings were taken against him, the company has deposited the entire advance tax as per its estimate. We do not feel persuaded to accept this contention. Under the Explanation to Section 221 of the I.T. Act, an assessee shall not cease to be liable to any penalty merely by reason of the fact that before the levy of such penalty he has paid the tax. When once the company committed default in paying the instalments before the specified dates, it cannot claim interest on the excess of tax paid over the tax determined on regular assessment.
6. The petitioner has also claimed interest under Section 243 of the I.T. Act. According to the learned counsel for the petitioner, interest payable to him under Section 214 of the I.T. Act amounts to refund and that, as the same is delayed, the petitioner is entitled to claim interest under Section 243 of the Act. We find no force in this contention. The refund contemplated is refund of the excess amount paid as tax. Interest payable on the excess amount under Section 214 of the I.T. Act does not amount to refund of any amount paid as tax. The claim made by the petitioner under Section 243 of the I.T. Act is, therefore, negatived.
7. The respondent has informed the petitioner by a letter that the claim for interest is not admissible. It does not amount to an order which the petitioner could have carried in revision before the CIT. Being so, we find no merit in the objection taken by the revenue that no relief should be given to the petitioner while exercising our jurisdiction under Article 226 of the Constitution.
8. The writ petition is accordingly dismissed. Having regard to all the circumstances of the case, we direct the parties to bear their respective costs.