Sandik Asia 280 ITR 643 (SC) is not correct and should be reconsidered
The Supreme Court had to consider whether interest is payable by the Revenue to the assessee if the aggregate of instalments of Advance Tax/TDS paid exceeds the assessed tax? The assessee relied upon Sandvik Asia Limited vs. CIT 280 ITR 643 where it was held that the assessee was entitled to be compensated by the Revenue for delay in paying to it the amounts admittedly due. HELD by the Supreme Court:
We have serious doubts about the correctness of the judgement in Sandvik Asia. In our view, the judgement in Modi Industries Ltd correctly holds that advance Tax or TDS loses its identity as soon as it is adjusted against the liability created by the assessment order and becomes tax paid pursuant to the assessment order. If Advance Tax or TDS loses its identity and becomes tax paid on the passing of the Assessment Order, then, is the assessee not entitled to interest under the relevant provisions of the Act? We say no more. With respect, we are of the view that Sandvik Asia has not been correctly decided. In the circumstances, we direct the Registry to place this matter before Hon’ble the Chief Justice on the administrative side for appropriate orders.