Which of the following is the correct sentence?
The Revenue has omitted to imposed late payment penalty on the first to third instalment payments.
The Revenue has omitted to imposed late payment penalty on the first to third instalments payment.
First, the "omitted to imposed" is wrong. The infinitive is "to impose" and that is what it should say.
Second, as there are penalties for each late payment, then "penalty" should be plural: "late payment penalties".
Now, as to your question itself, "installment" (or "instalment" in some countries) is modifying/describing/qualifying the type of payment. Therefore, it's an adjective. In English, fortuntately, adjectives don't have to agree in number to the noun they modify - that is, we don't make them plural to match plural payments. It is simply, "first to third installment payments" as you have in your first example.
The concept of one payment, as suggested by your second example, is awkwardly expressed, if indeed that is what you were trying to express at all. If there is one payment for the first to third installments, then you might say more clearly, "impose a penalty on the late payment of the first to third installments."
And back to omitted... I would rather use "neglected" or "failed" to impose, rather than omited to impose.
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