1989 (3) TMI 27 - HC - Income Tax

Summary

Issues:
1. Interpretation of advance tax payment under Chapter XVII-C of the Income-tax Act, 1961.
2. Liability to pay penalty under section 271(1)(a) of the Act for failure to pay advance tax.

Issue 1: Interpretation of Advance Tax Payment:
The case involves a dispute regarding the payment of advance tax and the consequent liability to pay a penalty for failing to make timely payments. The Tribunal examined the dates and amounts of the payments made by the assessee for advance tax during the financial year 1970-71. The Department contended that the payments made on December 30, 1970, and March 29, 1971, were not within the prescribed dates for advance tax payment. However, the Tribunal disagreed, stating that even though the payments were delayed, they still qualified as advance tax payments under Chapter XVII-C of the Act. The Tribunal emphasized that Section 211 of the Act only specifies the dates for advance tax payments and does not invalidate payments made after those dates. The Tribunal concluded that all payments made by the assessee within the financial year 1970-71 were advance tax payments, entitling the assessee to credit for these payments while calculating the penalty under section 271(1)(a) of the Act.

Issue 2: Liability to Pay Penalty for Failure to Pay Advance Tax:
The Tribunal's decision was challenged regarding the amount of penalty directed to be levied by the Appellate Assistant Commissioner. The Tribunal upheld that the amounts paid on March 31, 1970, and October 20, 1970, were indeed advance tax payments under Chapter XVII-C of the Income-tax Act, 1961. The dispute centered on the reasonableness of the penalty imposed. The Tribunal found the penalty amount reasonable and saw no justification for increasing the penalty. The High Court concurred with the Tribunal's decision, stating that there was no evidence presented to suggest that a higher penalty should be imposed. The Court upheld the Tribunal's decision and answered the question of law in favor of the assessee for the assessment year 1971-72.

In conclusion, the High Court affirmed the Tribunal's interpretation that the delayed payments made by the assessee for advance tax were valid under Chapter XVII-C of the Income-tax Act, 1961. The Court also upheld the Tribunal's decision regarding the penalty amount, finding it reasonable and dismissing the Revenue's challenge.