1982 (4) TMI 95 - AT - Income Tax

Summary

Issues:
1. Whether the appeal regarding the charging of interest under section 217 was rightly entertained by the Commissioner (Appeals).
2. Whether the assessee was obliged to file an estimate of advance tax and pay advance tax to avoid being treated as an assessee in default.

Analysis:

Issue 1:
The appeal raised the question of whether the Commissioner (Appeals) had the jurisdiction to entertain the appeal regarding the charging of interest under section 217 of the Income-tax Act, 1961. The revenue contended that there was no specific provision for filing such an appeal under section 246 of the Act. However, referencing the decision of the Bombay High Court in CIT v. Daimler Benz A.G., it was established that if the assessee denies the liability to pay interest, an appeal lies. In this case, as the assessee denied its liability to pay interest, the Commissioner (Appeals) rightly held that the appeal was maintainable. Therefore, the first ground raised by the revenue was dismissed.

Issue 2:
The main issue revolved around whether the assessee was required to file an estimate of advance tax and pay advance tax to avoid being treated as an assessee in default under section 217. The Commissioner (Appeals) held that there was no obligation on the part of the assessee to file an estimate of advance tax or pay any advance tax as per the provisions of section 209A. The revenue challenged this view, arguing that the assessee should have filed an estimate showing nil income. However, the assessee contended that there was no obligation to file an advance tax estimate or pay advance tax since the latest assessment resulted in nil income. The Tribunal analyzed the provisions of section 209A and concluded that the assessee did not fall under the categories mentioned in the section, therefore, the provisions did not apply. It was emphasized that the obligation to file an advance tax estimate and pay advance tax arises only under specific circumstances, and if those circumstances do not exist, there is no obligation on the part of the assessee. The Tribunal upheld the order of the Commissioner (Appeals) and dismissed the appeal, emphasizing that provisions regarding the imposition of interest should be construed strictly in favor of the taxpayer.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal, ruling in favor of the assessee on both issues regarding the charging of interest under section 217 and the obligation to file an estimate of advance tax and pay advance tax under section 209A.