2004 (3) TMI 55 - HC - Income Tax

Advance tax - estimate of income - estimate filed by the petitioner on Form No.28A. by the departmental authorities Held that Assessing Officer was not justified in rejecting this estimate and requiring the assessee to pay advance tax in terms of his order under section 210(3)

Summary

Issues: Challenge to rejection of advance tax estimate and requirement to pay advance tax based on a previous assessment.

In this case, the petitioner received an order requiring payment of advance tax based on a previous assessment. The petitioner then submitted an estimate of their current income for the financial year, which was rejected by the Assessing Officer. The main issue was whether the rejection of the estimate and the requirement to pay advance tax based on the previous assessment was justified.

Upon analysis, the court found that the Assessing Officer had not correctly applied the provisions of section 210(5) of the Income-tax Act. Section 210(5) allows an assessee to submit an estimate of their income if they believe it will be less than the amount demanded as advance tax. The court emphasized that this right is not limited to correcting mistakes in previous orders but extends to providing a different estimate based on the current income situation. In this case, the petitioner exercised their right under section 210(5) by submitting an estimate on Form No.28A, indicating a lower tax liability than what was demanded based on the previous assessment.

The court concluded that there was no legal basis for the Assessing Officer to reject the petitioner's estimate and demand payment based on the previous assessment. The petitioner was entitled to pay advance tax based on their own estimate of income as submitted on Form No.28A. Therefore, the court allowed the writ petition, quashing the letter that rejected the petitioner's estimate and required payment based on the previous assessment.