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Issues involved: Income-tax assessment for the assessment year 1977-78, interest under section 217(1)(a), penalty under section 273, obligation to furnish advance tax statement u/s 209A(1)(a).
Income-tax Assessment: The petitioners' income-tax assessment for the year 1977-78 showed nil income. However, for the assessment year 1979-80, they declared their total income as Rs. 5,47,710 in a revised return. The assessment concluded with a total income of Rs. 5,54,010, with interest u/s 217(1)(a) charged and a penalty show-cause notice u/s 273 issued. Interest under Section 217(1)(a) and Penalty under Section 273: The petitioners challenged the assessment order charging interest u/s 217(1)(a) and a penalty notice u/s 273, arguing they were not liable as they had not sent the advance tax statement as their previous year's income was nil. The dispute centered on the interpretation of the obligation to furnish the advance tax statement u/s 209A(1)(a). Obligation to Furnish Advance Tax Statement u/s 209A(1)(a): The petitioners contended they were not obligated to send the advance tax statement as no advance tax was payable due to their nil income in the previous assessment year. The respondents argued that even if the computed amount was nil, the statement had to be submitted. The court interpreted that if no advance tax was payable, there was no obligation to send the statement, as the purpose was to inform the Income-tax Officer of the computation. Judgment: The court held that as no advance tax was payable, the petitioners were not required to submit the statement u/s 209A(1)(a), thus not liable for interest u/s 217(1)(a) or penalty u/s 273. The respondents were ordered to refund the interest amount of Rs. 50,722 deducted from the petitioners. The petition was allowed, and the respondents were directed to pay the specified amount to the petitioners along with the costs.
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