Section 219 — the law in short
What the courts have decided on section 219, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Punjab State Warehousing Corporation v CIT
High CourtHelps departmentNo later treatment found
My client's old assessment was set aside, a fresh assessment produced a large refund, and no interest was paid. For a year before 1989-90, which section gives him interest?
For assessments up to 1988-89 there is no single interest provision: section 214 runs only to the date of the regular assessment, section 244(1) runs from three months after the order under section 240, section 244(1A) is confined to amounts paid after 31 March 1975 in pursuance of an order of assessment or penalty, and section 243 runs from three months after the total income is determined or the refund claim is made. Where the refund followed a fresh assessment and was granted the very next month, none of them was attracted, and the claim failed.
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Statutory position — s.219: advance tax is a payment of tax for the year, and credit for it must be given in the regular assessment
CBDT Circulars & InstructionsCuts both ways
The assessment order taxes the year but the computation sheet has not given credit for the advance tax my client paid, or has credited it to the wrong year. What is the statutory basis for insisting on the credit?
Section 219 is the answer and it is a single sentence: any sum, other than a penalty or interest, paid by or recovered from an assessee as advance tax in pursuance of Chapter XVII shall 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 therefor shall be given to the assessee in the regular assessment. So the section does two things: it characterises advance tax as a payment of tax rather than a deposit, and it fixes the year to which that payment belongs by reference to the financial year in which the tax was payable.
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.
