Section 213

Section 213 — the law in short

What the courts have decided on section 213, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• A.S. Glittre D/5 I/S Garonne v CIT Supreme CourtHelps taxpayer
  We paid tax on each voyage under section 172(4) and then elected under section 172(7) for a regular assessment, which came out much lower and produced a refund. The Department has refunded the tax but refused interest, saying what we paid was not advance tax. Is that right?
  No. Section 172(7) creates a legal fiction by which the payments already made under s.172(4) are treated as a payment in advance of the tax leviable for that assessment year, and the Supreme Court held that in construing that fiction all the consequences flowing from it must be assumed. The ad hoc assessment under s.172(4) is superseded and a regular assessment is made as per the provisions of the Act, so all the provisions of the Act relating to advance tax apply, and on excess payment the assessee is entitled to the excess and to interest on it.
• Statutory position — ss.215, 216 and 217: the advance tax interest scheme that ran before s.234B and s.234C, and the s.215(4) waiver power CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  I am defending an old assessment year, or a reassessment for one, and the order charges interest under s.215 or s.217 rather than s.234B. What do those sections actually require, and can the interest be waived?
  Sections 215, 216 and 217 are the interest provisions that preceded s.234B and s.234C, and they are all keyed to estimates under s.209A or s.212 — both of which were omitted by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1 April 1988, while s.234C(2) provides that s.234C applies to assessments for the assessment year commencing on 1 April 1989 and subsequent years. Section 215(1) charges simple interest at fifteen per cent per annum where advance tax paid on the assessee's own estimate is less than seventy-five per cent of the assessed tax (eighty-three and one-third per cent for a company), from 1 April following the financial year to the date of the regular assessment; s.216 charges interest at the same rate where the assessee under-estimated and thereby reduced either of the first two instalments, or wrongly deferred payment under s.213; and s.217 charges it where no statement or estimate was sent at all. Section 215(4) — applied to s.217 by s.217(2) — gives the Assessing Officer power to 'reduce or waive the interest payable by the assessee under this section' in such cases and circumstances as may be prescribed.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.