1990 (11) TMI 187 - AT - Income Tax

Summary

Issues:
Penalties under section 273(1)(b) for failure to furnish advance-tax statement under section 209A(1)(a) for assessment years 1986-87 and 1987-88.

Analysis:

1. The appeals were against penalties confirmed by the CIT(A) for failure to furnish advance-tax statements under section 209A(1)(a) for the assessment years 1986-87 and 1987-88. The penalties were imposed by the ACIT under section 273(1)(b) of the Income-tax Act, 1961.

2. The assessee, a private limited company engaged in dredging sand, had taxable income in the impugned years but did not pay advance-tax. The penalties were imposed for non-filing of advance-tax estimates, despite having taxable income. The defence of unawareness of provisions was rejected by the AO and confirmed by the CIT(A).

3. The counsel for the assessee argued that section 209A was not applicable as the assessee was previously assessed at a loss. The argument was supported by a judgment of the Bombay High Court. It was contended that the directors' lack of knowledge should exempt the company from penalties.

4. The Departmental Representative argued that the assessee, being previously assessed, was required to file advance-tax statements. Ignorance of the law was not a valid excuse. The department supported the penalties imposed.

5. The Tribunal analyzed the provisions of section 209A(1) and the obligations of previously assessed and unassessed taxpayers. The timing of being previously assessed was crucial in determining the filing requirements for advance-tax statements.

6. The Tribunal clarified that for filing an estimate, the assessee's previous assessment status should be determined on the last day of advance-tax payment. The liability to file an estimate under section 209A(1)(b) did not apply if the assessee was previously assessed.

7. The Tribunal further discussed the timing for filing advance-tax statements under section 209A(1)(a). It concluded that the assessee was not obligated to file a statement of advance-tax as it was not previously assessed before the first instalment due date.

8. Referring to a Bombay High Court judgment, the Tribunal emphasized that the obligation to file advance-tax statements was based on previous assessments and income computations. The Tribunal ruled in favor of the assessee for the assessment year 1986-87.

9. For the assessment year 1987-88, the Tribunal rejected the assessee's plea of unawareness of provisions as a valid defense. The failure to file the required estimate led to the confirmation of penalties for this year.

10. In conclusion, the Tribunal allowed the appeal for the assessment year 1986-87 and dismissed the appeal for the assessment year 1987-88, based on the analysis of the provisions and the assessee's compliance with advance-tax requirements.