1992 (2) TMI 132 - AT - Income Tax

Summary

Issues Involved:
1. Liability of the assessee to pay interest under section 215.
2. Obligation to file a statement of advance-tax under section 209A.
3. Validity of the statement of advance-tax filed by the assessee.
4. Consequences of performing an act not mandated by law.

Issue-wise Detailed Analysis:

1. Liability of the assessee to pay interest under section 215:
The primary issue in this appeal is whether the assessee is liable to pay interest under section 215 despite not being statutorily obligated to file a statement of advance-tax under section 209A. The assessee voluntarily filed an advance-tax statement on 14-6-1978 estimating the income at Rs. 2,00,000 and later revised it on 14-12-1978 estimating the income at Rs. 1,25,000. The Income Tax Officer (ITO) initially charged interest of Rs. 4,34,727 under section 215. The Commissioner of Income Tax (Appeals) [CIT(A)] held that since the assessee had significant carry forward losses, there was no obligation to file the advance-tax statement, and thus, interest under section 215 was not chargeable. However, upon further appeal, the Tribunal upheld the charging of interest under section 215, leading to the present appeal. The Tribunal concluded that no interest was chargeable under section 215, as the assessee was not obligated to pay advance-tax under section 209A or section 212, given the facts of the case.

2. Obligation to file a statement of advance-tax under section 209A:
Section 209A, introduced on 1-6-1978, mandates that every assessee file a statement of advance-tax if their current income is likely to exceed the amount specified in section 208(2). The assessee argued that as of 15-6-1978, the last completed assessment showed nil income and a declared loss for the assessment year 1978-79. Hence, no advance-tax was payable, and there was no obligation under section 209A to file a statement. The Tribunal agreed, noting that the assessee's previous assessments showed no taxable income, and thus, the obligation to file a statement of advance-tax did not arise.

3. Validity of the statement of advance-tax filed by the assessee:
The assessee contended that the voluntarily filed statement of advance-tax and its subsequent revision were invalid and non-est in law, as there was no statutory obligation to file them. The Tribunal supported this view, stating that performing an act not mandated by law should not result in adverse consequences. The Tribunal emphasized that the assessee's voluntary filing did not create a liability under section 215, as the advance-tax computation showed no tax payable.

4. Consequences of performing an act not mandated by law:
The Tribunal underscored that no person should suffer adverse consequences for performing an act not required by law. The assessee, not being obligated to file a statement under section 209A, could not be held liable for interest under section 215 or penalties under section 273. The Tribunal's decision was supported by precedents from the Calcutta High Court in Babulal Newar v. CIT and the Bombay High Court in Patel Aluminium (P.) Ltd. v. Miss K.H. Tawadia, ITO. Consequently, the Tribunal directed the ITO to delete the interest levied under section 215 and refund any amount paid by the assessee.

Conclusion:
In conclusion, the Tribunal allowed the appeal, determining that the assessee was not liable to pay interest under section 215 due to the lack of obligation to file a statement of advance-tax under section 209A. The voluntary filing of the statement did not create a liability, and the interest levied was directed to be deleted and refunded if already paid.