1984 (3) TMI 7 - HC - Income Tax

Summary

Issues:
1. Whether failure to file the estimate attracts penalty under section 273(b) of the Income-tax Act?
2. Whether the Tribunal was justified in setting aside the order of the Appellate Assistant Commissioner?

Analysis:

Issue 1: Failure to File Estimate and Penalty under Section 273(b)
The case involved a dispute regarding the imposition of a penalty under section 273(b) of the Income-tax Act due to the failure of the assessee to file estimates. The assessee contended that the penalty provision is attracted only when there is non-compliance with sub-section (3) of section 212, which requires the filing of estimates and payment of advance tax. The Appellate Assistant Commissioner held that the Income-tax Officer should have considered the advance tax payment made by the assessee before imposing the penalty. The Tribunal, however, relying on a previous decision, set aside the Appellate Assistant Commissioner's order and upheld the penalty. The High Court noted that the failure to file estimates, even if advance tax was paid, constituted a default within the provisions of the Act. The Court emphasized that the penalty under section 273(b) is attracted not just for non-filing of estimates but also for failure to pay advance tax. Therefore, the Court concluded that the penalty was justified in this case.

Issue 2: Tribunal's Decision to Set Aside Appellate Assistant Commissioner's Order
The second issue revolved around the Tribunal's decision to set aside the Appellate Assistant Commissioner's order and uphold the penalty imposed by the Income-tax Officer. The Appellate Assistant Commissioner had directed the Income-tax Officer to consider the advance tax payment before imposing the penalty. However, the Tribunal disagreed and reinstated the Income-tax Officer's decision. The High Court opined that since the penalty provision under section 273(b) covers both the failure to file estimates and the failure to deposit advance tax, the Income-tax Officer should have considered the advance tax payment while imposing the penalty. Therefore, the Court held that the Tribunal was not justified in setting aside the Appellate Assistant Commissioner's order and restoring the Income-tax Officer's decision. Consequently, the Court ruled in favor of the assessee on this issue.

In conclusion, the High Court answered the questions posed by the Income-tax Appellate Tribunal, affirming the imposition of the penalty for failure to file estimates under section 273(b) but disagreeing with the Tribunal's decision to set aside the Appellate Assistant Commissioner's order. The Court directed the parties to bear their own costs in the matter.