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Levy of interest under section 7D of the Companies' Profits (Surtax) Act, 1964 for the assessment year 1983-84. Detailed Analysis: 1. The appeals and cross objection arose from the levy of interest under section 7D of the Companies' Profits (Surtax) Act, 1964 for the assessment year 1983-84. The Assessing Officer imposed interest of Rs. 29,124 as the assessee did not file a statement of advance tax as required by section 7A(5) of the Act. The CIT (Appeals) reduced the interest to Rs. 3,231 based on the assessee's surtax return for the previous year. The Tribunal noted that no estimate of advance tax was filed by the assessee prior to the due dates for instalments, resulting in a nil advance surtax payable. 2. The Tribunal analyzed the provisions of section 7A, which govern the computation and payment of advance surtax by companies. Sub-section (3) outlines the method of computing surtax payable in advance, considering the latest previous year's chargeable amount. In this case, the last relevant assessment showed no surtax liability, and no provisional assessment was made for subsequent years. Sub-section (5) mandates the filing of a statement/estimate of advance tax, with specific dates for payment of instalments. The Tribunal concluded that as the advance surtax payable was nil, the assessee was not obligated to file a statement of advance tax. 3. The Tribunal further discussed the implications of section 7D, which deals with interest on underestimation of advance tax. It noted that no estimate was filed by the assessee before the due dates for the first two instalments, precluding any underestimation. Therefore, the Tribunal held that section 7D could not be invoked in this case, as there was no obligation on the assessee to furnish a statement of advance surtax. The absence of a penalty under section 9A(1)(b) further supported this interpretation. 4. Consequently, the Tribunal ruled that no interest under section 7D was leviable in this case, leading to the dismissal of the revenue's appeal and allowing the assessee's appeal. The levy of interest was canceled entirely. Additionally, the Tribunal rejected the cross objection filed by the assessee, deeming it unnecessary since the main appeal already challenged the interest levy. In conclusion, the Tribunal's detailed analysis of the provisions of the Companies' Profits (Surtax) Act, 1964, particularly sections 7A, 7D, and 9A, led to the cancellation of the interest levied on the assessee for the assessment year 1983-84. The judgment emphasized the absence of an obligation on the assessee to file an advance tax statement due to the nil advance surtax payable, ultimately resulting in the dismissal of the revenue's appeal and the allowance of the assessee's appeal.
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