JUDGMENT : VINOD CHANDRAN, J. 1. The Revenue is in appeal from the order of the Income Tax Appellate Tribunal. The assessment year is 1996-97 and the issue relates to the regular assessment made under Section 143(3) of the Income Tax Act, 1961 ('Act', for short) on an option exercised by the assessee, a non-resident shipping Company, under Section 172(7). The questions of law raised as seen from the memorandum are as below:- “(1). Whether, on the facts and in the circumstances of the case and also on the basis of the grounds urged, the Tribunal is right in law and fact in interfering with the order of rectification? (2). Whether, on the facts and in the circumstances of the case and in the light of the decision of the Supreme Court in 225 ITR 739 read with decision in 195 CTR (SC) 12: (i) is not the Circular No.730 dated 14.12.95 non-est? (ii) Is not the rectification based on circular No.9, dated 9.7.2001 in accordance with law? (iii) Is not the error in the earlier proceedings an error apparent from the record? (3). Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and in fact in highlighting various extraneous questions and finding the issue/issues debatable and is not such an approach and the conclusion reached wrong, perverse, unsustainable and uncalled for and unwarranted?” 2. The assessee is a non-resident shipping Company, represented by its agent at that point of time, who also filed an option under Section 172(7) to be assessed regularly under the provisions of the Act, before the expiry of the assessment year. Assessment was initiated by an intimation under Section 143(1) as per Annexure-A, which indicated that interest has been levied under Section 234A, B and C of the Act. Subsequently under Section 143(3), scrutiny assessment was made as per Annexure-C, when circular No.730 dated 14.12.1995, produced as Annexure-B was taken into account. The assessment at Annexure-C was passed levying interest under Section 234A, but not levying interest under Section 234B and C. Thereafter, noticing Annexure-D circular, bearing No.9/01 dated 9.7.2001, a rectification order was passed at Annexure-E levying interest under Section 234B and C. 3. Circular No.9/01 was issued noticing the judgment of the Hon'ble Supreme Court in (1997) 225 ITR 739 [A.S.GlittreD/5 I/S Garonneand Others v. Commissioner of Income Tax]. Circular No.9/01 was issued noticing the judgment of the Hon'ble Supreme Court in (1997) 225 ITR 739 [A.S.GlittreD/5 I/S Garonneand Others v. Commissioner of Income Tax]. The assessee challenged the rectified order in appeal. The first appellate authority held in favour of the assessee and deleted interest under Section 234B and C. The Tribunal affirmed the order of the first appellate authority. 4. The learned Standing Counsel, Government of India (Taxes) submits that what was attempted to be rectified is only a mistake apparent on the face of the record. True, the CBDT had come out with a circular which directed the officers not to levy interest under Section 234B and 234C for reason of the non-resident shipping Companies being subjected to a summary assessment under Section 172(4) and a regular assessment being contemplated only on an option being exercised by such non-resident shipping Companies before the closure of the assessment year. The option having been permitted to be exercised at any time before expiry of the assessment year, the CBDT was of the opinion that the provisions of advance tax would not apply to such assessees and the levy of interest cannot be made in accordance with the provisions as seen above. The assessees were also held to be not entitled to interest under Section 244A. The said view held force for quite some time until the Hon'ble Supreme Court in A.S.Glittre (supra) found otherwise. It was argued that the Tribunal erred insofar as finding that there is no error apparent on the face of the record. 2005 (3) SCC 57 [Commissioner of Central Excise v. Ratan Melting & Wire Industries], a decision of the Constitution Bench of the Hon'ble Supreme Court, is relied on to urge that the circular issued by the Board though binding on the authorities under the Act, the same cannot go against declaration of law made by the Supreme Court or the High Court. A rectification, on the basis of law declared by the Supreme Court or the High Court is permissible as has been found in 1988 (174) ITR 579 [Kil Kotagiri Tea and Coffee Estates Co. Ltd. v. Income Tax Appellate Tribunal & Others]. 5. The learned counsel appearing for the respondent however would seek to sustain the order of the Tribunal. A rectification, on the basis of law declared by the Supreme Court or the High Court is permissible as has been found in 1988 (174) ITR 579 [Kil Kotagiri Tea and Coffee Estates Co. Ltd. v. Income Tax Appellate Tribunal & Others]. 5. The learned counsel appearing for the respondent however would seek to sustain the order of the Tribunal. It is argued that the Hon'ble Supreme Court in A.S.Glittre (supra) was concerned with a specific issue: whether there was an entitlement for interest under Section 214 and had merely declared such entitlement on the basis of a fiction, as evident from the words employed in Section 172(7). There cannot be any declaration ferreted out from the decision as to there being a liability on the assessee, who exercised option under Section 172(7) to make payment of advance tax. The assessee hence is also not obliged to pay interest under Section 234B and C. 6. It is argued that the option to be exercised is prior to the expiry of the assessment year which could be on 31st of March of the year subsequent to the previous year. The advance tax payment has to be made quarterly, in the previous (financial) year of the assessment year and there could be no insistence of interest under Section 234B and C from the date of advance tax payable as contemplated under the statute. The liability to advance tax stands reduced to the extent tax would be deductible and collectible at source during the financial year by virtue of Section 209(c). The respondent-assessee, a non-resident having opted out of the assessment under Section 172(1) to (6); the payer has a responsibility to deduct the entire tax due at source under Section 195 and pay it to the department. Any failure on that count could only result in such payer being treated as an 'assessee in default' under Section 201 and there could be no interest levied on the payee non-resident. To advance the above contention reliance is placed on the decision of the Delhi High Court reported in [2011] 330 ITR 578 [Director of Income Tax Vs. Jacabs Civil Incorporated]. It is also argued that, as of now, the agent representing the respondent has been terminated from such agency and there is another agent appointed, who has also filed an application for substitution. Jacabs Civil Incorporated]. It is also argued that, as of now, the agent representing the respondent has been terminated from such agency and there is another agent appointed, who has also filed an application for substitution. It is further urged that Section 172 is a non-obstante clause and there can be no application of the other provisions nor could there be levy of interest under Section 234B and C. 7. At the outset, we reject the contention that the agency of the person who filed the returns and also exercised the option under Section 172(7), being not continued, is not liable to be assessed on behalf of the Principal. We notice the operative portion of our order dated 6.8.2018 in I.A.No.17/2017, which reads as under: “Looking at Chapter 50 of the Income Tax Act, 1961 (for brevity, the Act] being the liability in special cases, we are of the opinion that the agent, who had filed the return and also approached the statutory authorities, is an agent of the nonresident shipping Company and is a representative assessee, whose rights and liabilities have been specifically stated in Sections 162 and 161 of the Act. In such circumstances, we do not think that any substitution is called for.” 8. A.S. Glittre (supra) was a case in which the assessee had been paying tax on the basis of their receipts over the course of the financial year and had chosen to go under the regular assessment by exercising an option under Section 172(7). On a regular assessment being carried out, there was a refund due to the assessee on which they claimed interest under Section 214.{Pausing here for a moment, Section 214 as per subsection (3) is not applicable to the assessment year commencing on 01.04.1989 or the subsequent years and 'Interest on refunds' for those years will be under Section 244A.} The Assessing Officer declined the claim, but the Tribunal allowed it, which decision of the Tribunal was reversed by the High Court. The Hon'ble Supreme Court reversing the judgment of this Court found that the payment of tax would, on exercise of such option, be treated as advance tax and in that circumstances, there would be an entitlement for interest on a refund being ordered of the amounts paid. The Hon'ble Supreme Court reversing the judgment of this Court found that the payment of tax would, on exercise of such option, be treated as advance tax and in that circumstances, there would be an entitlement for interest on a refund being ordered of the amounts paid. It was held that all “the provisions of the Act in the determination of tax liability, including the ancillary, incidental or consequential matters pertaining to it are necessarily attracted” (sic), on such option being exercised. 9. The assessee, who under a summary assessment, pays amounts and then seeks regular assessment on completion of which, he is entitled to a refund, would be entitled to interest under Section 244A. As a corollary if there is any shortfall, the assessee would necessarily be liable to interest; on exercise of such option, under Section 234A, B and C. A.S. Glittre (supra) was on the question of entitlement of an assessee who exercises an option under Section 172(7) to get interest, if eventually there is a refund due; on the amount of tax paid in advance under Section 172(3) & (4) being in excess of the assessed tax under Section 172(7). The Scheme of 172 was explained so: “The scheme of Section 172 of the Act appears to be this: Section 172(1) of the Act gives a right to the Income Tax Officer to levy and recover tax in the case of any ship belonging to a non-resident, in a summary manner, (ad hoc assessment) notwithstanding anything contained in the other provisions of the Act. It is an absolute right conferred on the assessing authority. The assessee has no right to object to the same. Normally, this will be assessment of the assessee for the year. But, under Section 172(7) of the Act a right is given to the assessee to claim before the expiry of the assessment year relevant to the previous year in which the date of departure of the ship from the Indian port falls, that an assessment, according to the provisions of the Act, in a regular manner be made. Thus, a right is given to the assessee to opt for a regular assessment although a “rough and ready” or a “summary assessment” has already been made under Section 172(4) of the Act. It is a valuable right. Thus, a right is given to the assessee to opt for a regular assessment although a “rough and ready” or a “summary assessment” has already been made under Section 172(4) of the Act. It is a valuable right. If the assessee exercises the right conferred on him under Section 172(7) of the Act, the Income Tax Officer is bound to make an assessment of the total income of the previous year of the assessee and the tax payable on the basis thereof “should be determined in accordance with the other provisions of the Act” and any payment made under the section (earlier) “shall be treated as a payment in advance of the tax” leviable for that assessment year and the difference between the sum so paid and the amount of tax found payable by him on such assessment, shall be paid to the assessee or refunded to him. The “ad hoc” assessment made under Section 172(4) of the Act is superseded and a “regular assessment” is made as per the provisions of the Act. In such a case, it is only proper and appropriate to hold that all “the provisions” of the Act in the determination of the tax liability including the ancillary or incidental or consequential matters pertaining to it are necessarily attracted”. 10. The legal fiction created by sub-section (7) to treat the tax paid under the adhoc assessment as advance tax, according to the Hon'ble Supreme Court, can be given its full effect only if all the provisions of the Act in respect of payment of advance tax is applied, and thus entitling the assessee who exercised an option under sub-section (7), to any interest on tax paid in advance, if there is a refund ordered on regular assessment. As a corollary, we have to understand that when an option is exercised by the assessee to go under the regular assessment as contemplated under the Act necessarily the rights and liabilities as provided for in the provisions under the Act kicks in and the non-obstante clause no more has any effect. As a corollary, we have to understand that when an option is exercised by the assessee to go under the regular assessment as contemplated under the Act necessarily the rights and liabilities as provided for in the provisions under the Act kicks in and the non-obstante clause no more has any effect. It is the assessee's option not to be assessed under Section 172 in a summary manner and when such option is willingly exercised under sub-section (7) then, the provisions of Section 172 cease to have any effect and in such circumstance, the overriding effect of the provision by reason of the non-obstante clause also cease to have any effect. Necessarily, the assessee who exercised such option under sub-section (7) would have to comply with all the formalities and when entitled to such rights available there-under would also be equally liable to any injurious consequence of payment of interest as contemplated under the Act. 11. The Hon'ble Supreme Court held that the words “shall be treated as a payment in advance of the tax” is a fiction created by statute. The learned Judges found no perceptible distinction between the words “advance tax” as used otherwise in the statute and “payment in advance of the tax” as used in Section 172(7). On how statutory fictions can operate it was reiterated that; when one is bidden to treat an imaginary state of affairs as real, by a fiction created by statute, all the consequences flowing from it would also have to be treated as real, unless there is a statutory prohibition. Here the fiction created, on an option exercised for regular assessment, is that the amounts paid on summary assessment be treated as advance tax. Hence, the fiction has to be given full play and all such consequences which follow, whether it benefits the assessee or favours the department, has to be necessarily borne. If the advance tax payment is in excess then the assessee is entitled to interest on refund. Likewise if there is shortfall, the Department can demand, validly, interest for such shortfall as provided in the statute. The fiction having been made to operate, on the option exercised by the assessee; if there is a shortfall in payment of advance tax, we cannot allow the mind to boggle when it comes to injurious consequences for the assessee. 1952 AC 109 [East End Dwellings Co. The fiction having been made to operate, on the option exercised by the assessee; if there is a shortfall in payment of advance tax, we cannot allow the mind to boggle when it comes to injurious consequences for the assessee. 1952 AC 109 [East End Dwellings Co. Ltd. v. Finsbury Borough Council] as quoted often by the Apex Court, with approval, is apposite : “If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. ... The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs”. 12. We have to also observe that the assessee who comes under Section 172 is given an option either to be summarily assessed under that provision or go for regular assessment under the statute; the later option being exercised at any time after the financial year and before the expiry of the assessment year. The assessee has within their knowledge the entire figures for the subject year and could very well arrange its affairs accordingly. Hence, the assessee exercising an option under Section 172(7) does so voluntarily with open eyes and when the regular assessment brings in additional liability; it cannot be wriggled out of. 13. On the question of rectification and there being in existence a mistake/error apparent from the face of the record, we have to briefly state the chronology of events. The decision of the Supreme Court was in the year 1997 and Annexure D Circular withdrew Annexure B circular on 09.07.2001. The assessment order Annexure C was dated 23.01.1998; subsequent to the decision of the Supreme Court and without noticing the authoritative pronouncement. The learned Counsel for the respondent had an argument that the levy was only on account of withdrawal of the earlier circular and it was not a valid cause for rectification; since it is a mere change of opinion of the Department. The learned Counsel for the respondent had an argument that the levy was only on account of withdrawal of the earlier circular and it was not a valid cause for rectification; since it is a mere change of opinion of the Department. We are however not inclined to accede to such contention especially noticing that the 2nd circular was on the basis of the decision of the Hon'ble Supreme Court in A.S.Glittre(supra) which was passed before the assessment order. 14. With the interpretation placed on the provision by the Hon'ble Supreme Court, the circular at Annexure B has absolutely no effect as has been found in Ratan Melting & Wire Industries (supra). The Full Bench decision in (119) ITR 334 [Commissioner of Income tax v. B.M. Edward India Sea Foods, Cochin] also would not have any application in view of the Constitution Bench decision of the Hon'ble Supreme Court. In B.M. Edward (supra) the issue considered was the effect of withdrawal of a Circular of the Board of Revenue which was valid for the subject assessment year. There was no issue, as in the present case, of a circular having been rendered ineffective for reason of a declaration made by the Apex Court which declaration applies and overrules any Circular issued by a statutory authority. The question of rectification being made on the basis of a binding decision of the Constitutional Court is covered by the Division Bench decision of this Court in Kil Kotagiri Tea and Coffee Estates Co. Ltd. (supra). Even otherwise here the rectification was not on account of a cancellation of the Circular. The Assessing Officer failed to notice the change in law which occurred prior to the assessment being framed, and relied on a Circular, the terms of which were no longer sustainable. 15. Yet another argument is that the interest liability would not arise under Section 234B & 234C since the same can only be cast on the payer who has a liability and statutory responsibility to deduct the entire tax due from a non-resident under Section 195. Jacabs Civil Incorporated dealt with the demand of interest under Sections 234B & 234C, made against Companies incorporated outside India; non-residents earning income within India on execution of various projects undertaken by resident entities. Jacabs Civil Incorporated dealt with the demand of interest under Sections 234B & 234C, made against Companies incorporated outside India; non-residents earning income within India on execution of various projects undertaken by resident entities. The learned Judges found that under Section 195 the project proponents who engaged the non-residents for execution of work; who also paid the project proponents, had a statutory duty to deduct the tax due at source, which in the case of non-residents was the entire tax due, as per Section 195. The advance tax component payable under Clause (a),(b) & (c) of Section 209 stood reduced by the advance tax “deductible or collectible” at source. Since under Section 195 the entire tax payable by a non-resident was “deductible and collectible” at source, no interest can be levied on the non-resident for the amounts which were so “deductible and collectible” at source, is the finding. It was also held that in that context such interest would be liable to be recovered from the resident-payer who is deemed to be an assessee in default under Section 201. 16. What distinguishes the above cited case from the instant one is the status of the respondent herein, a charterer or owner of a ship, termed as a Special Case under Chapter XV of the Act, liable under Section 172. Being engaged in shipping business the appellant is treated as a special case and assessed under Section 172 (1) to (6) during the previous year in which the tax deduction at source would have been possible. Section 172 is a non obstante clause as evident from sub-section(1); providing a separate mode of levy and collection of tax in the case of a cargo or passenger ship belonging to or chartered by a nonresident. It is hence a complete code in itself for levy and collection of tax from ships of non-residents; subject only to the option provided under sub- section(7). Sub-section (2) deems seven and a half percent of any payment made to the owner or charterer of ships, for such carriage, either directly or through any person, whether it be paid or payable in and out of India, to be income accruing in India. Sub-section (3) mandates that the Master of the ship, shall file a return of the full amount paid or payable before the Assessing Officer, before its departure. Sub-section (3) mandates that the Master of the ship, shall file a return of the full amount paid or payable before the Assessing Officer, before its departure. The proviso speaks of the departure being permitted on the satisfaction of the A.O that the filing of such return, before departure is impossible and the Master has made sufficient arrangements through another to file such return. The proviso also deems any return filed by that agent within 30 days of the ships departure to be sufficient compliance of the provisions. Sub-section .(4) speaks of the manner in which assessment is to be framed at rates as applicable under Section 194. Subsection (4A) provides a limitation period of nine months for completion of assessment, from the end of the financial year in which the return is furnished. Sub-section (5) enables the A.O to call for the accounts or documents required by him and sub-section .(6) empowers the Collector of Customs or such other officer to refuse port clearance unless he is satisfied of the payment of the tax due or of the satisfactory arrangements made for such payment. This is a code in itself and the option to be exercised for going under the regular assessment as provided in sub-section (7) is before the close of the assessment year. 17. The non-resident charterer or owner and his agent, interested in the clearance of the ship after its cargo is unloaded; invariably subjects themselves to the assessment under Section 172. There is hence no obligation on the payer to deduct tax and the payment is ensured by the non-resident or agent before departure or at least within 30 days from departure. The complete code under Section 172 ensures assessment and payment of tax within a time frame; after which the assessee opts out of the scheme under Section 172 to move under the regular assessment; when necessarily the assessee would be entitled to all benefits and mulcted with all liabilities flowing from the other provisions of the Act. On the questions of law framed, we find that the Tribunal has erred insofar as interfering with the order of rectification especially since the rectification was made on the basis of a decision of the Hon'ble Supreme Court which was the declared law even when the original order which was rectified was passed. On the questions of law framed, we find that the Tribunal has erred insofar as interfering with the order of rectification especially since the rectification was made on the basis of a decision of the Hon'ble Supreme Court which was the declared law even when the original order which was rectified was passed. Circular No.730 dated 14.12.95 has lost its significance and validity, on the Supreme Court authoritatively speaking on the provision under Section 172(7) and the effect of the option exercised, in A.S.Glittre(supra). There was hence an error apparent on the face of the record and the Tribunal erred in setting aside the order of rectification. On the above findings, we answer the questions of law framed by the Revenue in favour of the Revenue and against the assessee. The appeal is allowed setting aside the order of the Tribunal and that of the first appellate authority and restoring that of the assessing authority. There will be no order as to costs.