In this case assessee had deposited advance tax at Rs. 10,054 on 21st Dec., 1981. assessment in question was completed on 10th July, 1984. Consequently, assessee sought for interest on amount of refund at Rs. 6,476. ITO, however, held that assessee had failed to pay advance tax within time. Therefore, it was not entitled to any interest under s. 217 of IT Act. It was quite clear that advance-tax instalments were to be deposited on or before 15th June, 15th Sept., and 15th Dec., He also referred to Circular containing instruction No.984 dt. 10th Oct., 1975 and corrigendum dt. 21st March, 1977 which spoke of non-payment of interest on lines mentioned by him. Accordingly, he rejected assessee's application. said decision has been endorsed by AAC. assessee has consequently come up in second appeal before us. We have heard representative of parties at length in this matter. On behalf of assessee reference was made to decision of Gujarat High Court in Chandrakant Damodardas vs. ITO (1980) 16 CTR (Guj) 1: (1980) 123 ITR 748 (Guj) where in it has been clearly held that under s. 214 of IT Act, failure to pay instalments on due dates might involve assessee liable to penalty, but if other conditions regarding payment of advance was satisfied, concept under s. 214 being totally unconnected with deprivation of interest. interest on excess advance-tax must be paid if two conditions are satisfied. Another decision quoted in this behalf was decision of Kerala High Court in Santha Shenoy vs. Union of India & Ors. (1982) 29 CTR (Ker). 127: (1982) 135 ITR 39 (Ker). On behalf of Department, reference was made to decision of A.P. High Court in Kangundi Industrial Works Pvt. Ltd. X. ITO (1980) 14 CTR (AP) 328: (1980) 121 ITR 339 (AP) wherein assessee s writ claiming interest under s.214 was rejected by their Lordships on ground that assessee had committed default by making belated payment of advance-tax and has forfeited his right to claim interest under s. 214 of IT Act. It was further contended that question as to whether payment after due date but within financial year in question was controversial and no interest could be allowed to assessee in proceedings under s. 44. For this purpose reliance was placed upon decision of Madhya Pradesh High Court in CIT vs. Jagannath Narain Kutumbic Trust (1983) 144 ITR 526 (MP). After carefully considering all facts and circumstances of case we are of opinion that assessee is entitled to succeed. On merits, consensus of authority is clearly in favour of assessee. only decision quoted by Department i.e. Kangundi Industrial Works Pvt. Ltd. ITO (1980) 14 CTR (AP): 378 (1980) 121 ITR 339 (AP) was specifically considered and dissented from by Full Bench of Kerala High Court in Santha Shenoy vs. Union of India and Ors. (1982) 19 CTR (Ker) 177: (1982) 135 ITR 39 (Ker). Even M.P. High Court in CIT vs. Jagannath Narain Kutumbic Trust (supra) held that assessee was entitled to interest on advance tax paid before end of relevant financial year even if it was belated. This only difficulty in way of assessee probably at that time could be said to be controversial. But this is not ground for rejecting assessee's claim taken by ITO. He has rejected claim on merits. It is correct that assessee's application to ITO was under s. 154 because after ITO has finalised amount of refund due any claim could be made only under s. 144 and not otherwise. But this is not application seeking for reapplication of mind by ITO on matter on which he had already considered issue and decided against assessee. In other words, if ITO had allowed interest at time of final assessment he could not withdraw it by proceedings under s. 154. net result will be very dangerous and it will be wholly in discretion of ITO to allow or not to allow interest in respect of instalments paid after due date but within financial year. In this case instalment was paid merely on due date. If assessee had issued cheque which would have been encashed on 21st December probably payment itself would have been considered to be within time and if ITO had granted interest it could not be withdrawn by him or even by Commissioner in proceeding under s. 213 of Act. But if ITO has refused to grant interest it is stated that he can not grant it except in proceedings under s. 154. Now what is remedy left to assessee if interest is not granted to him in first instance. only remedy is application and such application if treated to be under s. 154 would not be competent. This would result in very dangerous consequences. entire matter would be in discretion of ITO. He can make distinctions which will be with out any practical difference. This Bench has also been taking view in favour of assessee, so also was decision in Anup Engg. Ttd. vs. ITO (1983) 36 CTR (Guj) 195: (1984) 145 ITR 105 (Guj). Upon consideration of these circumstances, we are of opinion that assessee should be granted interest when he has made sincere efforts to comply with law relating to payment of advance-tax which was not much beyond due date. appeal is accordingly allowed. *** NATHMAL GADIA v. INCOME TAX OFFICER