The interpretation of the expression "at any time before the date" in Section 212 (3a) of the Income-tax Act, 1961, and the requirement for a mistake apparent from the record under Section 154.

( 1 ) THE Income-tax Appellate Tribunal (Delhi Bench a), has referred the following questions under Section 256 (2) of the Income-tax Act, 1961 (briefly, "the Act"), for the opinion of this court : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the Income-tax Officer had exercised his discretion in not charging interest under section 217 (1a) in the original assessment ?

( 2 ) WHETHER, on the facts and in the circumstances of the case, the Tribunal was correct in holding that interest under Section 217 (1a) of the Income-tax Act, 1961, could not be charged by taking recourse to Section 154 ?" 2. The relevant assessment year is 1972-73. The assessee, a partnership firm, carried on the business of manufacture and sale of earth digging equipment and it also derived income from government contracts. During the financial year 1971-72, relevant to the assessment year 1972-73, the assessee was required to pay advance tax of Rs. 3,830 under Section 210 of the Act, which was computed on the basis of income of Rs. 55,640 for the assessment year 1970-71. On regular assessment, the total income of the assessee and the tax chargeable for the assessment year 1972-73 were determined at Rs. 3,69,270 and Rs. 85,498, respectively. The assessee paid instalments of advance tax which had become due on September 15, and December 15, as demanded under Section 210 of the Act. Since the current income of the assessee was greater than the income on which the advance tax was demanded by the Income-tax Officer, it was obligatory on the part of the assessee to submit its estimate of advance tax under Section 212 (3a) at any time before the date on which the last instalment of advance tax became due which the assessee filed on March 15, 1972. The Assessing Officer was of the view that, under section 212 (3a) of the Act, the estimate should have been filed by the assessee before March 15, 1972, that is, on or before March 14, 1972, and that having been filed after March 14, 1972, on march 15, 1972, when the last instalment of advance tax became due, interest under Section 217 (1a) was clearly chargeable. As the same was not charged at the time of regular assessment made under Section 143 (3), he was of the view that a mistake apparent from the record in not charging interest under Section 217 (1a) had arisen and, therefore, he issued a notice under section 154 of the Act calling upon the assessee to show cause why the interest under Section 217 (1 A) be not charged, non-charging of which in the regular assessment being a mistake apparent from the record.

( 3 ) THE assessee filed a reply contending that there was no mistake apparent from the record and that, therefore, the impugned notice under Section 154 could not have been issued. The income-tax Officer rejected the contention of the assessee. He, therefore, worked out the interest chargeable under Section 217 (1a) at Rs. 8,295 and charged the same by his order passed under section 154.

( 4 ) THE assessee then filed an appeal before the Appellate Assistant Commissioner who accepted the appeal and reversed the order of the Income-tax Officer. In his opinion, non-charging of interest under Section 217 (1a) was not a mistake apparent from the record rectifiable under section 154. He was of the view that Rule 40 of the Income-tax Rules, 1962 ("the Rules", for brevity sake), gives unfettered discretion to the Income-tax Officer to reduce or waive the interest under Section 217 and the Income-tax Officer would be deemed to have waived the interest in the exercise of his discretion. In short, the view taken by him was that the assessing authority did not charge interest under Section 217 (1a) on account of the discretion conferred on him by Rule 40 of the Rules and that failure to charge interest was not a mistake apparent from the record within the meaning of Section 154.

( 5 ) THE Revenue then preferred an appeal to the Appellate Tribunal