Cochin Bench of Tribunal, through judicial order, recommended that above appeal be heard by Special Bench. Accordingly, Special Bench was constituted to hear and dispose of appeal, in light of following question, referred to by Bench:"On facts and in circumstances of case, if non-resident assessee's case is covered under section 172(1) and subsequently he opted for assessment to be made of his total income under section 172(7), whether he is liable for interest to be levied under section 234B and 234C, even if assessment is completed under section 143(3), in view of CBDT Circular No. 9 of 2001, dated 9-7-2001?" 2. case was fixed and both parties have been heard. assessee is non-resident company incorporated in Republic of Malta and in previous year, relevant to assessment year 1996-97 was engaged in shipping business in international traffic. Special provisions of section 172 of Income-tax Act (hereinafter called 'Act') were applicable and assessee paid or made necessary arrangement for payment of taxes under section 172(4) of Act. However, before close of assessment year 1996-97, assessee opted for assessment under section 172(7) of Income-tax Act. summary assessment under section 143(1)(a) was made on 27-10-1997 creating demand against assessee. Assessing Officer also charged interest under sections 234B and 234C of Income-tax Act which was later withdrawn in light of Circular of Central Board of Direct Taxes No. 730, dated 14-12-1995. 3. Subsequently, case was taken up for scrutiny and assessment order under section 143(3) was passed on 23-1-1998. Even at that time, interest under sections 234B and 234C was not charged. Thereafter, Hon'ble Supreme Court decided case of A.S. Glittre D/5 I/S Garonne v. CIT [1997] 225 ITR 739 and held that assessee was entitled to interest under section 214 on refund allowed to assessee under section 172(7) of Income-tax Act. On basis of above decision of Hon'ble Supreme Court, CBDT withdrew Circular No. 730, dated 14-12-1995 and termed it as "untenable" and issued Circular No. 9 of 2001, dated 9-7-2001. It was directed that in case of regular assessment under section 172(7), non-resident assessee, is liable to pay interest under sections 234B and 234C of Income-tax Act and also entitled to receive interest under section 244A of Income-tax Act. Assessing Officer, on basis of above Circular rectified earlier order in this case on 28-3- 2002 under section 154 of Income-tax Act and levied interest under sections 234B and 234C amounting to Rs. 20,66,372 and Rs. 3,55,727 respectively. 4. assessee impugned above levy in appeal before CIT (Appeals), who after considering relevant statutory provisions and Circulars of CBDT, held that there was no mistake in earlier order, which was attempted to be rectified under section 154 of Income-tax Act to charge interest under sections 234B and 234C of Act. He observed that Assessing Officer had no jurisdiction to levy interest under sections 234B and 234C of Income-tax Act. decision of Hon'ble Supreme Court was not applicable as Court never held that interest under above provision could be charged in terms of section 172(7) of Income-tax Act. He held that order passed under section 154 by Assessing Officer to charge interest under sections 234B and 234C was bad in law and without any legal backing. learned CIT (Appeals) also considered question of levy of interest under sections 234B and 234C on merit. He observed that decision in case of A.S. Glittre D/5 I/S Garonne (supra) held that payment of tax made under section 172(1), read with section 172(4) is to be treated on par with "advance tax" and accordingly held that assessee would be entitled to interest on refund due to excess tax paid under section 172(1) of Act. On basis of above decision of Supreme Court, Circular No. 9, dated 9-7-2001 had been issued withdrawing earlier Circular No. 730. It has been directed that interest under sections 234B and 234C could be charged. But on consideration of clear decision and clarification issued by CBDT, learned CIT (Appeals) held that Circular No. 9 did not have proper legal backing and support. Hon'ble Supreme Court did not hold that provision of section 208 would be applicable in case of ship belonging to non-resident departing from any harbor located in India. learned CIT (Appeals) held that there was absolutely no scope of payment of advance tax in respect of cases covered under section 172 of Act which is special enactment. When tax is payable by owner of ship or any other person on his behalf, there is no question of payment of advance tax as recovery of tax from non-resident is simultaneous with accrual of income and recovery of tax from non-resident is simultaneous with accrual of income and its determination. Thus when there was no obligation to pay advance tax, question of charging of interest under sections 234B and 234C did not arise. He held accordingly that charging of interest under sections 234B and 234C was neither sustainable in law, nor on facts. He deleted interest charged under above provisions even on merit. 5. Revenue is aggrieved and has brought issue in appeal before Appellate Tribunal. We have heard both parties. Smt. Beerna Sarasan, t h e learned Departmental Representative vehemently challenged impugned order of CIT (Appeals) as wrong and unsustainable under law. She submitted that their Lordship of Supreme Court in case of A.S. Glittre D/5 I/S Garonne (supra) did not accept clarifications issued by CBDT in Circular No. 730, dated 14-12-1995 and laid down that provisions of payment of advance tax were applicable where regular assessment was made as per option of assessee in terms of section 172(7) of Act. Tax recovered from assessee under sub-section (4) of section 172 was held to be advance payment of tax and in case it was less than assessed tax, assessee was to pay difference and also interest in terms of sections 234B and 234C of Income- tax Act. Thus, all provisions of Act in determining tax liability including ancillary, accidental or consequential matters pertaining to it were attracted. She brought to our notice, following observations from decision in case of A.S. Glittre D/5 I/S Garonne (supra):"We hold that ITAT was justified in holding that since payment made under section 172(4) of Act, is by fiction treated as advance tax, all provisions in respect of advance tax will apply" (p- 745E). ". . . when one is bidden to treat imaginary state of affairs as real he has to also imagine as real consequences that flow from it unless prohibited by some other provisions." (p-744H). She accordingly emphasized that their Lordships of Supreme Court have held that all provisions of Act in respect of payment of advance tax will apply. In wake of above decision, CBDT vide Circular No. 9 of 2001, dated 9-7-2001 clarified that earlier Circular No. 730 was no longer legally tenable. It was withdrawn. In wake of judgment of Supreme Court, legal effect is that where regular assessment under section 172(7) of non-resident assessee is made, assessee is liable to pay interest under sections 234B and 234C of Act and also to receive interest under section 244A. She also pointed out that assessee had himself requested that interest be allowed to assessee under section 244A of Act in light of decision of Supreme Court in case of A.S. Glittre D/5 I/S Garonne (supra). She accordingly justified charging of interest under sections 234B and 234C of Income-tax Act in light of decision of Supreme Court and Circular No. 9, dated 9-7-2001 of CBDT. She argued that there was no infirmity in order of Assessing Officer in applying decision of Supreme Court which was adopted in Circular of CBDT. learned Departmental Representative also relied upon decision of Hon'ble Kerala High Court in case of Kil Kotagiri Tea & Coffee Estates Co. Ltd. [1988] 174 ITR 579 to contend that any view adopted contrary to decision of jurisdictional High Court would be mistake apparent from record and liable to be rectified under section 154 of Act. Their Lordship of Supreme Court in case of A.S. Glittre D/5 I/S Garonne (supra) had only declared law and same decision was applicable retrospectively. It was interpretation of law, which was always in existence but was wrongly not applied and therefore interest was charged through rectification. She accordingly supported charging of interest in this case. 6. Shri R. Vijayaraghavan, learned counsel for assessee, kly supported impugned order of CIT (Appeals). He submitted that provisions of section 172 of Income-tax Act were complete code relating to assessments of non resident shipping company engaged in business of carriage of passenger, live stock etc. through ship on Port in India. He argued that under provisions of section 172 assessee has no liability to pay advance tax under section 207/208 of Income-tax Act and, therefore, question of levy of interest under sections 234B and 234C would not arise. Provisions of sections are very clear. In fact in this very case, revenue authorities had earlier imposed interest under section 234A of Income-tax Act but same was deleted on appeal by CIT (Appeals) and his order was upheld by Income-tax Appellate Tribunal, Cochin Bench in ITA No. 507/Coch./98, decided on 22-4-1999. Tribunal, Cochin Bench in ITA No. 507/Coch./98, decided on 22-4-1999. Bench held that assessee was not liable to pay advance tax and provisions of section 208 of Act were not applicable in this case. He further pointed out that in this case option was exercised by assessee under sub-section (7) of section 172 at fag end of assessment year i.e. in February/March, 1997 and it is at that stage that revenue could make regular assessment but at that point of time question of payment of advance tax cannot arise. Financial year in which advance tax was payable, was over. There is no machinery in section to ask for advance tax or interest under sections 234B and 234C of Act, in c s e option under sub-section (7) of section 172 is not exercised by assessee. right of revenue to make regular assessment would come into being, when option is exercised and that was done only in February/March, 1997. There is no question of payment of advance tax at that time and revenue could recover only shortfall in tax in terms of section 172(7). provision of section 208 is not applicable in case of non-resident shipping company assessable under section 172 and this was clearly admitted by revenue in Circular No. 730, dated 14-12-1995. aforesaid Circular was in operation when assessment was made. decision of Hon'ble Supreme Court in case of A.S. Glittre D/5 I/S Garonne (supra) did not lay down that assessee exercising option under section 172(7) was liable to pay advance tax. It only held that tax paid under section 172(4) was to be treated as advance tax. There is no justification for revenue to apply later Circular No. 9 of 9-7-2001 which was not in existence when assessment was made. Circular can neither be withdrawn, nor applied with retrospective effect. They always apply prospectively. learned counsel further contended that Circulars beneficial to assessee were binding on revenue but adverse Circulars are not binding on assessee. 7. learned counsel argued that provisions of section 154 of Income-tax Act had no application in this case, as highly debatable and controversial questions were involved. These questions were beyond review in proceedings under section 154 of Income-tax Act authorizing Assessing Officer to rectify mistake apparent from record. learned counsel for assessee relied upon following decisions: (i)CIT v. B.M. Edward, India Sea Foods, Cochin [1979] 119 ITR 334 (FB)(Ker. (ii)CIT v. Chandmal Mohan Lal [1996] 222 ITR 255 (Pat.). (iii)BASF (India) Ltd. v. W. Hasan, CIT [2006] 280 ITR 136 (Bom.). (iv)A.S. Glittre D/5I/S Garonne case (supra). (v)CIT v. Sun Engg. Works P. Ltd. [1992] 198 ITR 297 (SC). (vi)Navnit Lal C. Javeri v. K.K. Sen, AAC [1965] 56 ITR 198 (SC). 8. We have given careful thought to rival submissions of parties. T h e short question involved before us in this appeal is whether deletion of interest levied by Assessing Officer under sections 234B and 234C in proceedings under section 154 of Income-tax Act is justified? In order to decide this controversy, we must first consider Scheme of section 172, other relevant provisions and circulars which are as under: "H.-Profits of non-residents from occasional shipping business 172. Shipping business of non-residents.-(1) provisions of this section shall, notwithstanding anything contained in other provisions of this Act, apply for purpose of levy and recovery of tax in case of any ship, belonging to or chartered by non-resident, which carries passengers, livestock, mail or goods shipped at port in India. . . . (2) Where such ship carries passengers, livestock, mail or goods shipped t port in India, seven and half per cent of amount paid or payable on account of such carriage to owner or charterer or to any person on his behalf, whether that amount is paid or payable in or out of India, shall be deemed to be income accruing in India to owner or charterer on account of such carriage. (3) Before departure from any port in India of any such ship, master of ship shall prepare and furnish to Assessing Officer return of full amount paid or payable to owner or charterer or any person on his behalf, on account of carriage of all passengers, livestock, mail or goods shipped at that port since last arrival of ship thereat: Provided that where Assessing Officer is satisfied that it is not possible for master of ship to furnish return required by this sub-section before departure of ship from port and provided master of ship has made satisfactory arrangements for filing of return and payment of tax by any other person on his behalf, Assessing Officer may, if return is filed within thirty days of departure of ship, deem filing of return by person so authorised by master as sufficient compliance with this sub- section. (4) On receipt of return, Assessing Officer shall assess income referred to in sub-section (2) and determine sum payable as tax thereon at rate or rates in force applicable to total income of company which has not made arrangements referred to in section 194 and such sum shall be payable by master of ship. (5) For purpose of determining tax payable under sub-section (4), t h e Assessing Officer may call for such accounts or documents as he may require. (6) port clearance shall not be granted to ship until Collector of Customs, or other officer duly authorised to grant same, is satisfied that tax assessable under this section has been duly paid or that satisfactory arrangements have been made for payment thereof. (7) Nothing in this section shall be deemed to prevent owner or charterer of ship from claiming before expiry of assessment year relevant to previous year in which date of departure of ship from Indian port falls, that assessment be made of his total income of previous year and tax payable on basis thereof be determined in accordance with other provisions of this Act, and if he so claims, any payment made under this section in respect of passengers, livestock, mail or goods shipped at Indian ports during that previous year shall be treated as payment in advance of tax leviable for that assessment year, and difference between sum so paid and amount of tax found payable by him on such assessment shall be paid by him or refunded to him, as case may be. (8) For purposes of this section, amount referred to in sub-section (2) shall include amount paid or payable by way of demurrage charge or handling charge or any other amount of similar nature."9. salient features of above section 172 are as under: (i)That it is special provision applicable to ship belonging to or chartered by non-resident carrying passenger, live stock, goods at port in India. section overrides other provisions of Act. (ii)The port clearance to aforesaid ship of non-resident shall not be granted unless tax assessable as per summary or ad hoc assessment under this section has been paid or satisfactory arrangements have been made for payment of such taxes. (iii)Sub-section (7), owner of ship has "option" to claim before expiry of assessment year, relevant to previous year in which ship was in port in India to ask revenue to make assessment of his total income as per other provisions of Act and determine tax payable thereof. (iv)When such option is exercised, Assessing Officer shall determine total amount of tax payable and after deducting tax paid by him demand difference or make refund to him, as case may be. (v)By legal fiction taxes paid under sub-section (3) and (4) shall be treated as payment in advance of tax for that assessment year. (vi)That section is complete code and it is option of assessee to be exercised within assessment year. There is no right with Assessing Officer to apply and invoke provisions of other sections of Income-tax Act, if not claimed by assessee. CBDT had issued clarification on above provisions in Circular No. 730, dated 14-12-1995 as under: "1. Section 172 of Income-tax Act, 1961, deals with shipping business of non-residents. scheme of section 172 is that every time ship belonging to or chartered by non-resident makes voyage from port in India, carrying passengers, livestock, mail or goods, shipped at airport, 7 per cent of amount paid or payable on account of carriage of passengers, etc., is taken as income and tax levied on such income at rate applicable to foreign company. rate, at present, is 55 per cent. 2. assessment and payment is to be made before ship is granted port clearance. exception is that in suitable cases ship may be allowed to leave, provided satisfactory arrangements are made to ensure that return is filed within 30 days of departure of ship and for payment of taxes. 3. Under section 172(7), non-resident owner or charterer is allowed to claim before end of relevant assessment year that he be assessed on his total income of previous year and tax payable on basis thereof be determined in accordance with other provisions of Act. When such claim, is made and assessment is made thereupon, tax paid under section 172(4) b y non-resident owner or charterer would be treated as payment in advance of tax leviable for that assessment year before determining amount of tax finally due. It may be noted that under section 172(7), choice is entirely that of non-resident tax-payer to be assessed under other provisions of Act. 4. payments made under section 172(4) by non-resident ship owner is payment of tax on actual assessments under that section and it is not payment of advance tax within meaning of Income-tax Act there being no advance tax liability within scheme of section 172. 5. question that arises for consideration in such regular assessment made under section 143(3), read with provisions of section 172(7), is whether such assessee is liable to levy of interest under sections 234B and 234C or not. As payment of any tax under section 172(4) is not considered to be payment of advance-tax within meaning of Income-tax Act, Board is of view that assessee who exercises his option under section 172(7) to get his total income assessed in normal course, is not liable to pay advance tax under section 208 in respect of income of nature referred to in sub- section (2) of section 172 of Income-tax Act. 6. Hence Board is of opinion that non-resident assessees engaged i n business of carriage by shipping of passengers and goods, etc., shall neither be liable to pay interest under sections 234B and 234C nor entitled to interest under section 244A of Income-tax Act, 1961 in respect of their income attributable only to business of such carriage of passengers and goods, etc." aforesaid Circular was withdrawn and replaced by clarifications issued in Circular No. 9 of 2001, dated 9-7-2001. said Circular is as under: "1. Board had earlier issued Circular No. 730 regarding treatment of t x paid under section 172(3) by non-resident engaged in shipping business. Under provisions of section 172, every time ship belonging to or chartered by non-resident makes voyage from port in India, carrying passengers, livestock, mail or goods shipped at port in India, 7.5 per cent of amount paid or payable on account of carriage of passengers etc. is deemed as income and tax is levied on such income at rate applicable to foreign company. assessment and payment is to be made before ship is granted port clearance. exception is that, in suitable cases ship may be allowed to leave provided satisfactory arrangements are made to ensure that return of income if filed and payment of tax is made within 30 days of departure of ship. 2. Under provisions of section 172(7), non-resident owner or charterer is allowed option to be assessed on his total income of previous year in accordance with other provisions of Act. When such option is exercised and assessment is made accurately, tax already paid under provisions of section 172(4) by non-resident owner or charterer would be treated as tax paid in advance for that assessment year before determining amount of tax finally due. 3. question that arose for consideration of Board at time of issue of Circular No. 730 was that when regular assessment is made under section 143(3), read with provisions of section 172(7), whether such assessee would liable to levy of interest under sections 234B and 234C or not. On other hand, in case of refund, question of entitlement of interest under section 244A would also rise. Board, vide Circular No. 730, dated 14- 12-1995 clarified that assessee, who exercises his option under section 172(7) to get his total income assessed in accordance with other provisions of Act, is neither liable to pay interest under sections 234B and 234C, nor entitled to receive interest under section 244A of Income-tax Act, 1961. 4. This issue has subsequently been discussed and decided by Supreme Court in case of A.S. Glittre D/5 I/S Garonne v. CIT [1997] 225 ITR 739. It has been held that payment of tax under section 172(3)/(4) is at par with advance tax instalments. Hence, in case of regular assessment under section 172(7) assessee is entitled to refund, as well as, interest on such refund. 5. Circular No. 730, issued by Central Board of Direct Taxes on this issue is, under circumstances, no longer legally tenable and is, therefore, withdrawn. It is clarified that in case of regular assessment under section 172(7), non-resident assessee is liable to pay interest under sections 234B and 234C and also entitled to receive interest under section 244A of Income- tax Act, 1961 as case may be." 10. It would be appropriate to quote sections 207, 208 and 234B and 234C of Income-tax Act. These are as under: "207. Liability for payment of advance tax.-Tax shall be payable in advance during any financial year, in accordance with provisions of sections 208 to 219 (both inclusive), in respect of total income of assessee which would be chargeable to tax for assessment year immediately following that financial year, such income being hereafter in this Chapter referred to as "current". 208. Conditions of liability to pay advance tax.-Advance tax shall be payable during financial year in every case where amount of such tax payable by assessee during that year, as computed in accordance with provisions of this Chapter, is five thousand rupees or more. "234B. Interest for defaults in payment of advance tax.-(1) Subject to other provisions of this section, where, in any financial year, assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where advance tax paid by such assessee under provisions of section 210 is less than ninety per cent of assessed tax, assessee shall be liable to pay simple interest at rate of one per cent for every month or part of month comprised in period from 1st day of April next following such financial year to date of determination of total income under sub-section (1) of section 143 and where regular assessment is made, to date of such regular assessment, on amount equal to assessed tax or, as case may be, on amount by which advance tax paid as aforesaid falls short of assessed tax. Explanation 1.-In this section, 'assessed tax' means tax on total income determined under sub-section (1) of section 143 or on regular assessment as reduced by amount of tax deducted or collected at source in accordance with provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income. (Other portion of provision are not relevant and, therefore, not reproduced). 234C. Interest for deferment of advance tax.-(1) Where in any financial year, - (a) company which is liable to pay advance tax under section 208 has failed to pay such tax or- (i)the advance tax paid by company on its current income on or before 15th day of June is less than fifteen per cent of tax due on returned income or amount of such advance tax paid on or before 15th day of September is less than forty-five per cent of tax due on returned income or amount of such advance tax paid on or before 15th day of December i s less than seventy-five per cent of tax due on returned income, then, company shall be liable to pay simple interest at rate of one per cent per month for period of three months on amount of shortfall from fifteen per cent or forty-five per cent or seventy-five per cent as case may be, of tax due on returned income; (ii) advance tax paid by company on its current income on or before 15th day of March is less than tax due on returned income, then, company shall be liable to pay simple interest at rate of one per cent on amount of shortfall from tax due on returned income: Provided that if advance tax paid by company on its current income on or before 15th day of June or 15th day of September, is not less than twelve per cent or, as case may be, thirty-six per cent of tax due on returned income, then, it shall not be liable to pay any interest on amount of shortfall on those dates; (b) assessee, other than company, who is liable to pay advance tax under section 208 has failed to pay such tax or, - (i) advance tax paid by assessee on his current income on or before 15th day of September is less than thirty per cent of tax due on returned income or amount of such advance tax paid on or before 15th day of December is less than sixty per cent of tax due on returned income, then, assessee shall be liable to pay simple interest at rate of one per cent per month for period of three months on amount of shortfall from thirty per cent or, as case may be, sixty per cent of tax due on returned income; (ii) advance tax paid by assessee on his current income on or before 15th day of March is less than tax due on returned income, then, assessee shall be liable to pay simple interest at rate of one per cent on amount of shortfall from tax due on returned income: Provided that nothing contained in this sub-section shall apply to any shortfall in payment of tax due on returned income where such shortfall is on account of underestimate or failure to estimate- (a) amount of capital gains; or (b) income of nature referred to in sub-clause (ix) of clause (24) of section 2, and assessee has paid whole of amount of tax payable in respect of income referred to in clause (a) or clause (b), as case may be, had such income been part of total income, as part of remaining instalments of advance tax which are due or where no such instalments are due, by 31st day of March of financial year: Provided further that nothing contained in this sub-section shall apply to any shortfall in payment of tax due on returned income where such shortfall is on account of increase in rate of surcharge under section 2 of Finance Act, 2000 (10 of 2000), as amended by Taxation Laws (Amendment) Act, 2000 (1 of 2001), and assessee has paid amount of shortfall, on or before 15th day of March, 2001 in respect of instalment of advance tax due on 15th day of June, 2000, 15th day of September, 2000 and 15th day of December, 2000: Provided also that nothing contained in this sub-section shall apply to any shortfall in payment of tax due on returned income where such shortfall is on account of increase in rate of surcharge under section 2 of Finance Act, 2000 (10 of 2000) as amended by Taxation Laws (Amendment) Act, 2001 (4 of 2001) and assessee has paid amount of shortfall on or before 15th day of March, 2001 in respect of instalment of advance tax due on 15th day of June, 2000, 15th day of September, 2000 and 15th day of December, 2000. Explanation.-In this section, tax due on returned income means tax chargeable on total income declared in return of income furnished by assessee for assessment year commencing on 1st day of April immediately following financial year in which advance tax is paid or payable, as reduced by amount of tax deductible or collectible at source in accordance with provisions of Chapter XVII on any income which is subject to such deduction or collection and which is taken into account in computing such total income. (2) provisions of this section shall apply in respect of assessments for assessment year commencing on 1st day of April, 1989 and subsequent assessment years." It is further necessary to mention that advance tax is to be paid in three instalments in financial year under section 211 in all cases with few exceptions; first instalment, second and third instalments being payable by 15th September, 15th December and 15th March of financial year preceding every assessment year. Having noted relevant provisions and Circulars of CBDT, we can proceed to consider their legal implication to resolve controversy raised before us in this appeal. We would divide controversy in two parts, first whether interest is payable under sections 234B and 234C where regular assessment is made as per option under section 172(7) and secondly whether same could be charged through rectification of assessment order on account of mistake apparent from record. Taking provisions of section 172 first, we are of considered opinion that there is no scope to levy interest, on plain reading of provisions. section is overriding and special and is applicable in case of non-resident owner of ship visiting Indian Ports for carriage of goods, live stock. It provides machinery different from one provided in other provisions of Act for levy and recovery of taxes. It provides for assessment in summary manner. It is complete code and therefore, question o f invoking any other provision of Act for recovery of taxes and interest cannot arise. liability to pay income-tax would arise under section only at time of visit of ship to Indian Port, may it be in April, May or June of financial year. Recovery of tax cannot wait till dates of payment of instalments of advance tax under section 211 of Income-tax Act. Tax payable on each visit by ship owned by non-resident is required to be worked out. Scheme envisaged is quite different from regular assessment of entire income of previous year. Therefore, where special Scheme of assessment in section is applicable, other provisions of Act cannot be invoked for levy and recovery of taxes and interest. 11. Under sub-section (7) of section, option is given to non- resident to claim assessment of his/its total income as per provisions of Income-tax Act. However, "option" is with assessee and not with revenue. It is reasonable to hold that above option is for benefit of assessee. Further option is to be exercised in assessment year. phrase "in assessment year" would simply mean whole of assessment year. assessee can exercise option at any point of time in assessment year. Only after option is exercised, revenue authorities would be entitled to make assessment as per other provisions of Act. ld. Departmental Representative had contended that assessee should have exercised option earlier and should not have waited till end of assessment year. This contention is to be rejected as it is "option" and not "obligation". Having regard to clear scheme, question of liability to pay advance tax cannot arise in case of non-resident governed by section 172. assessment year starts only after end of previous year or financial year. Advance tax is payable on current income and in financial year as per sections 208 and 211 of Income-tax Act. Therefore, having regard to Scheme envisaged in sub-section (7) of section 172, assessee can have no obligation to pay advance tax. All dates on which advance tax is payable are over before start of assessment year in which option can be exercised. Therefore assessee cannot be expected to do impossible. Nor any s u c h inference is possible from plain reading of provision. Therefore, question of non-resident assessee having any liability to pay advance tax cannot arise. It is further to be noted that sub-section (7) only authorizes Revenue to determine his total income in accordance with other provisions of Act and tax payable thereon. section through fiction provides that whatever non-resident had paid in previous year shall be treated as payment of advance of tax and difference between tax so paid and tax found payable by him on such assessment shall be paid by him or refunded to him. That is what plain language of section clearly provides. Only difference i.e. amount of tax paid by him and tax found payable is to be recovered from non-resident. Section does not go beyond above. It does not provide for levy of other charges, like interest etc. Section is overriding and language mandates only recovery of difference or payment of refund. There is no indication for recovery of interest. Tax paid by non-resident is treated as advance tax on account of fiction provided in section. Whether tax paid by non-resident would qualify as "advance tax" is immaterial because of fiction provided in section. Therefore, having regard to plain and simple language of statutory provision, directions issued by Central Board of Direct Taxes in Circular No. 730, dated 14-12-1995 to effect that non-resident is not liable to pay tax under section 208 and consequently interest under sections 234B and 234C cannot be charged, were quite in order and were required to be given effect to. Directions given in Circular No. 9 of 2001 being contrary to statutory provisions and adverse are/were not binding on assessee. question whether assessee on given facts of case would be entitled to interest on refund is required to be determined in accordance with statutory provision and not as per directions of Central Board of Direct Taxes. It is settled law that directions of CBDT cannot substitute or override statutory provision. Beneficial Circulars stand on different footings. They are binding on all revenue authorities. On consideration of relevant statutory provision, their Lordship of Supreme Court held that assessee in case considered by their Lordship, was entitled to interest under section 214 of Income-tax Act. However, there is no question of charging interest from assessee under sections 234B and 234C of Income-tax Act, on basis of above decision or Circulars of CBDT. 12. As already noted, Revenue to justify imposition of interest in question, is mainly relying upon decision of Supreme Court in case of A.S. Glittre D/5 I/S Garonne (supra). In that case assessee was non- resident shipper represented by agent. ships used to carry goods from Port to various places. matter related to previous years relevant to assessment years 1967-68 and 1969-70. Ships of assessee paid tax under section 172(4) of Income-tax Act. Thereafter, assessee exercised option and right conferred on him and claimed "regular assessment" be made. Tax paid b y assessee under section 172(4) was more than tax assessed and assessee became entitled to refund of excess amount paid by him. Such amounts were refunded. However claim of assessee to pay interest on excess amount was rejected by Assessing Officer. This rejection was upheld in appeal by Appellate Asstt. Commissioner. On further appeal Income- tax Tribunal, Cochin Bench held, after review of relevant provisions of Act that payment made by assessee under section 172(4) would be on par with "advance tax" payments. It was further held that since these payments have, by fiction, been-treated as advance tax, it necessarily follows that all provisions in respect of payment of advance tax in Act will apply if there is any excess payment made by assessee, then assessee would be entitled to interest under section 214 of Act. Appellate Tribunal directed Income-tax Officer to allow interest claimed by assessee. Appellate Tribunal referred following question to Hon'ble Kerala High Court:- "Whether amount directed under section 172, clause (7), of Income-tax Act, to be treated as payment in advance of tax leviable for assessment year in question, would carry interest as amount of advance tax would under section 214 if same is payable under sections 207 to 213 of Act?" Hon'ble High Court decided matter against assessee and held that tax paid under section 172(4) was not payment of advance tax under Act. Hon'ble High Court answered question in negative and in favour of t h e Revenue. assessee thereafter filed appeal before Hon'ble Supreme Court. Their Lordships of Hon'ble Supreme Court after considering provision of section 172 definition of advance tax and other relevant provisions held that assessee was entitled to interest under section 214. It was further held that under sub-section (7) of section 172 right was given to assessee to opt for regular assessment although "rough and ready" or "summary assessment" has already been made under section 172(4) of Act. It is valuable right. If assessee exercises right conferred on him under section 172(7) of Act, Income-tax Officer is bound to make assessment of total income of previous year of assessee and tax payable on basis thereof should be determined in accordance with other provisions of Act. Their Lordships of Hon'ble Supreme Court further observed as under:- "Section 172(7) of Act provides that payment made under section shall be treated as payment in advance of tax leviable for that assessment year. It only means that such payment would be treated as advance of tax leviable. Such payments are treated on par with advance income-tax leviable. Such payments are treated on par with advance income-tax payments. It is implicit from tenor and phraseology employed in section 172(7) of Act to effect, "payment made under section . . . shall be treated as payment in advance of tax leviable for that assessment year" that in substance, legal fiction is created by which payments have been treated as advance tax. That is purpose for which legal fiction is created. In construing said legal fiction, it will be proper and necessary to assume all those 4 facts on which alone fiction can operate. So, necessarily all provisions in Act in respect of payment of advance tax will apply. On effecting regular assessment, if there is any excess payment made by assessee, then assessee would be entitled to excess amount paid and also interest, for payments made in excess of tax assessed. We are unable to appreciate distinction drawn by High Court between 'advance tax' and 'payment in advance of tax' mentioned in sub-section 172(7) of Act. We hold that distinction so drawn has no basis. 'We are afraid that High Court has failed to given due effect to language employed in section 172(7) of Act and scope of legal fiction enshrined therein.' 'The High Court was swayed by title used in corresponding provision of predecessor Act (Indian Income-tax Act, 1922 - section 44C), wherein there was heading to section - 'Adjustment'. Section 172 of Act contains no such heading. We hold that Income-tax; all provisions in respect of advance tax will apply and if on regular assessment made under section 172(4) of Act is, by fiction, treated as advance tax; all provisions in respect of advance tax will apply and if on regular assessment made under section 172(7) of Act, there is any excess payment made by assessee, then assessee would be entitled to it and also interest thereon under section 214 of Act." 13. CBDT while issuing Circular dated 9-7-2001 and ld. Departmental Representative during course of argument laid too much emphasis on observation of their Lordships, "by fiction" treated as "advance tax" and "all provision in respect of advance tax will apply". Observations are being misapplied and read out of context. It is settled law that judgment must be read as whole and observations in judgment are to be considered in light of question, which were before Court (Hon'ble Supreme Court). decision takes its colour from question involved and therefore lower Courts, while trying to apply decision must carefully ascertain true principles laid down by Court and not to pick words or sentences from judgment, divorced from context of questions under consideration by Court. [Kindly see decision of Hon'ble Supreme Court in case of Sun Engg. Works (P.) Ltd. (supra)]. Revenue has not considered context and setting in which above observations were made. They have disregarded portion of decision in which relevant sub-section (7) is reproduced to effect "payment made under section shall be treated as payment in advance of tax leviable for that assessment year". Their Lordships emphasized, "that in substance legal fiction is created by which payment have been treated as advance tax". So section by legal fiction treats payment made by assessee under sub-section (4) of section 172 as payment of "advance tax". legal fiction has to be carried to its logical conclusion and all consequences would flow from such fiction. When amount paid is treated, as advance tax there is no reason why interest should not be allowed if such advance tax is found to be in excess and is refunded. This is ratio of decision. However it is being understood, as if it was held that assessee has obligation to pay advance tax and if not paid or paid short, assessee would be liable to pay interest under sections 234B and 234C of Income-tax Act. No such inference is possible. No such support can be derived by revenue from decision. Second Circular of CBDT is based upon misinterpretation of judgment of Hon'ble Supreme Court. Thus levy of interest on basis of Circular, in our opinion, is totally unjustified. 14. We can now proceed to consider question of levy of interest under section 154 of Income-tax Act through rectification of assessment order. peculiarity of section 154 is that it can be invoked only to rectify mistake apparent from record. apparent mistake would mean clerical or arithmetic mistake which is glaring and obvious, may it be of law or of facts. If mistake is to be discovered through long process of reasoning, it would not be mistake apparent from record. decision on debatable point of law cannot be mistake apparent from record. Highly debatable issues are out whereas hardly debatable issues fall in purview of section. 15. As for as question of charging of interest under sections 234A, 234B and 234C is concerned, matter was thrashed by Special Bench of Income- tax Appellate Tribunal in case of Motorola Inc. v. Dy. CIT [2005] 95 ITD 269 (Delhi)(SB). After elaborated discussion, Bench held as under:"Sections 234A and 234B were inserted by Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989. sections were amended by Direct Tax Laws (Amendment) Act, 1989 with effect from 1-4-1989. perusal of Circular No. 549, dated 31-10-1989 shows that those sections were introduced in substitution of earlier provisions of act under which discretion was given to assessing authority to charge or not to charge interest and also to levy penalties for same default. old provisions were found to be rather complicated. Therefore with view to simplifying them and also to remove discretion given to assessing authority which had led to litigation and consequent delay in realization of dues, amendment Act substituted old provisions by simple scheme of payment of mandatory interest for defaults mentioned therein. [Para 52] levy of interest under sections 234A, 234B and 234C is mandatory in sense that it cannot be waived or reduced by Income-tax authorities. Assessing Officer, after amendment and introduction of new sections, does not have any discretion to waive or reduce interest chargeable under new provisions. [Para 53] If interest is mandatory in nature, it follows that if there is such default as would attract provisions of sections 234A to 234C, then assessee becomes automatically liable to pay interest. assessing authority has no power to waive or reduce same, power which he enjoyed before introduction of new provision and which has been taken away from him with effect from 1-4-1989. Once default is established, liability to pay interest fastens itself upon assessee, without anything more. [Para 56]" 16. From above decision, it follows that levy of interest is mandatory and if default is established on record, then Assessing Officer has no power to waive or reduce same. If facts of case show that interest was leviable but was not levied, it would be case of mistake apparent from record. Assessing Officer can certainly show that conditions for levy of interest are satisfied on record and impose same in order under section 154 of Income-tax Act. However, in present case, it is not possible to hold that provisions of sections 234B and 234C were applicable. Conditions for levy of interest are not at all satisfied in this case. This has been discussed above. Besides issue involved is highly debatable and not mistake under provisions of section 154 of Income-tax Act. We may briefly note below some of points of controversy generating highly debatable issues- (i)Whether, having already applied Circular No. 730, dated 14-12-1995, which was in operation when regular assessment was made, could CBDT withdraw above Circular and replace it by Circular No. 9, dated 9-7-2001 with retrospective effect? (ii)Having regard to conscious and deliberate Act of revenue to withdraw interest levied under sections 234B and 234C of Income-tax Act, could interest be levied under above provision subsequently? (iii)Whether, in view of language of section 172 of Act, there is any justification to impose interest under section 234B and 234C of Act? (iv)Whether decision of Income-tax Appellate Tribunal in case of assessee dated 22-4-1999 relating to deletion of interest under section 234A with finding that provisions of section 208 of Income-tax Act were not applicable in this case, was not binding and effective even in respect of interest charged under sections 234B and 234C of Income-tax Act? (v)Whether, matter could not be treated as already considered and decided by Income-tax Appellate Tribunal? (vi)Whether, decision of Hon'ble Supreme Court in case of A.S. Glittre D/5 I/S Garonne v. CIT 225 ITR 739 can be read to have held that assessee is liable to pay advance, tax in terms of sections 208 and 211 of Income-tax Act? In our considered opinion, above questions with horde of other questions arising in this case are highly debatable and cannot be considered in proceedings under section 154 of Income-tax Act, which permits rectification of mistake apparent from record only. Question of application of section 154 of Income-tax Act on facts of case is, therefore, totally ruled out here. On above facts and in circumstances of case, we hold that no interest under sections 234B and 234C could be levied on basis of Circular No. 9 of 2001 or under any other provision of Act. learned CIT(Appeals) was fully justified in deleting interest charged. We concur with his view and dismiss this appeal of Revenue. *** ASSISTANT COMMISSIONER OF INCOME TAX v. NORASIA LINES (MALTA) LTD.