1991 (8) TMI 19 - HC - Income Tax

Summary

Issues:
Interpretation of provisions under section 209A(1)(a) of the Income-tax Act, 1961 regarding the necessity of furnishing a statement of advance tax and levying interest under section 217.

Analysis:
The case involved a reference under section 256(1) of the Income-tax Act, 1961 for the assessment year 1981-82. The primary question was whether the Tribunal was correct in holding that it was not necessary for the assessee to furnish a statement of advance tax under section 209A and consequently, whether interest under section 217 of the Act was leviable. The Income-tax Officer initially charged interest under section 217 as the assessee had not submitted the statement of advance tax as required by section 209A(1)(a) of the Act.

The Commissioner of Income-tax (Appeals) found that the assessee was not obligated to submit the statement of advance tax as the last regular assessment and return filed by the assessee were both at "minus" figures. The Department appealed to the Tribunal, which upheld the decision of the Commissioner of Income-tax (Appeals) based on the negative figures of the assessed and returned income of the assessee in the latest previous years.

The main contention raised during the hearing was that the Tribunal did not consider the facts related to the assessment year 1980-81 and that the matter should be reconsidered. However, the court rejected this contention. Section 209A mandates taxpayers previously assessed under the Income-tax Act to send a statement of advance tax before the due date of the first instalment of advance tax. In this case, the returned income of the assessee for the relevant period was negative, making it unnecessary to file a statement of advance tax.

Additionally, the court addressed the applicability of sub-section (4) of section 209A, emphasizing that it only applies if the assessee is liable to pay advance tax under sub-sections (1), (2), or (3). As the assessee had no obligation to furnish a statement of advance tax under section 209A(1)(a), sub-section (4) was deemed inapplicable. The court concluded that the question referred to them solely pertained to the obligation of the assessee to furnish a statement under section 209A(1)(a).

Ultimately, the court answered the reference question in the negative and in favor of the assessee, ruling that the assessee was not required to furnish a statement of advance tax under section 209A(1)(a) and therefore, no interest under section 217 was leviable. No costs were awarded in the judgment.