9911796707
|
Home
Issues:
Levy of penalty under section 273(c) of the Income-tax Act, 1961. Detailed Analysis: The judgment pertains to the assessment year 1973-74 and revolves around the question of whether the Tribunal was correct in upholding the levy of penalty under section 273(c) of the Income-tax Act, 1961. The case involved a situation where the assessee was issued a notice of demand to pay advance tax under section 210 of the Act, based on the tax assessed for the previous year. However, during the final assessment for the relevant year, it was discovered that the tax payable exceeded the advance tax demanded by more than 1 percent, triggering an obligation for the assessee to file an estimate of income and pay the advance tax as per section 212(3A) of the Act. The assessee's defense was twofold. Firstly, the assessee claimed ignorance regarding the increase in share income from firms, which was not accepted by the Assessing Officer. Secondly, the assessee argued that the order demanding advance tax under section 210 should have been amended after the finalization of the firm's assessment, as per section 210(3), to reflect the actual income. Failure to amend the order rendered it invalid, according to the assessee, thereby negating the applicability of section 212 and subsequent penalty under section 273(c). The court delved into the provisions of sections 209, 210, and 212, emphasizing the interplay between them in determining advance tax liabilities. It highlighted the mandatory nature of section 212(3A) in cases where the correct income exceeds the estimated income by a significant margin. The court scrutinized the language of the relevant sections, distinguishing between discretionary ("may") and imperative ("shall") terms to ascertain the obligations imposed on the Income-tax Officer and the assessee. The judgment referenced precedents to support its interpretation, emphasizing that mere inaccuracies or clerical errors in demand notices do not invalidate them. It underscored the importance of harmonizing sections 210(3) and 212(3A) to ensure effective compliance and prevent exploitation of procedural gaps by taxpayers. Ultimately, the court held that the assessee was obligated to file the income estimate and pay the appropriate advance tax as per section 212(3A), affirming the justification for the penalty under section 273(c. In conclusion, the court answered the question in the affirmative, ruling against the assessee and upholding the levy of penalty under section 273(c) of the Income-tax Act, 1961.
|
