1974 (7) TMI 7 - HC - Income Tax

Summary

Issues:
1. Validity of the notice issued by the Income-tax Officer on March 20, 1974, demanding advance tax payment.
2. Interpretation of provisions under the Income-tax Act, 1961 regarding the submission of revised estimates of current income by the assessee.

Analysis:
1. The petitioner, a public sector Corporation, challenged a notice issued by the Income-tax Officer on March 20, 1974, demanding advance tax payment. The Income-tax Officer had issued multiple notices based on different assessments, leading to confusion regarding the amount of advance tax payable by the petitioner for the assessment year 1974-75. The petitioner contested the last notice, claiming that its estimate of current income submitted on December 17, 1973, and reiterated on March 15, 1974, should be considered valid. The Income-tax Officer rejected the March estimate as time-barred, demanding full payment based on the previous notice. The High Court held that the Income-tax Officer's rejection was unjustified, emphasizing the importance of timely estimates and the legality of the petitioner's actions.

2. The judgment delves into the provisions of the Income-tax Act, 1961, specifically focusing on sections 209, 212, and related clauses. It highlights that the Income-tax Officer computes advance tax based on the total income as per section 209(a) and can amend it under section 209(d) if a provisional assessment is made. Section 212 allows the assessee to submit estimates of total income and advance tax payable, with the provision for sending revised estimates. The court clarified that once the assessee submits an estimate, it supersedes the total income computed by the Income-tax Officer, even if amended later. The department's argument that revised estimates should be filed after each amendment by the Income-tax Officer was deemed fallacious. The judgment emphasized that the petitioner's March submission was a reiteration of the earlier estimate, not a revised return, and thus, the subsequent notice demanding full payment was deemed illegal.

In conclusion, the High Court quashed the impugned notice dated March 20, 1974, and ruled in favor of the petitioner, emphasizing the importance of timely estimates and the supremacy of the assessee's submitted income estimates over subsequent amendments by the Income-tax Officer.