1979 (10) TMI 106 - AT - Income Tax

Summary

Issues:
Penalty under section 273(C) of the IT Act imposed on the assessee for failure to furnish an estimate of advance tax under section 212(3A) of the Act.

Detailed Analysis:

1. The appeal was filed by the assessee against the order of the AAC sustaining a penalty imposed by the ITO under section 273(C) of the IT Act, 1961, at a reduced figure of Rs. 2,220. The facts leading to the appeal include the assessee being served an order under section 210 of the Act to pay advance tax, filing an estimate under section 212(1) showing tax payable, and subsequently declaring a total income of Rs. 77,140, leading to a tax demand of Rs. 46,542 on regular assessment.

2. The ITO opined that the assessee failed to comply with the provisions of section 212(3A) by not submitting an estimate of income despite declaring enhanced income. The ITO issued a notice under section 274 read with section 273(c) calling for a penalty for failure to furnish the advance tax estimate. The assessee claimed ignorance of the law and unexpected profits from a partnership firm as reasons for non-compliance.

3. The ITO imposed a penalty of Rs. 2,550 under section 273(c), which was reduced to Rs. 2,220 by the AAC. The assessee contended that filing an estimate under section 212(1) should suffice and that penalty under section 273(c) was not warranted, especially since a penalty under section 273(a) was already imposed for furnishing an untrue estimate.

4. The Tribunal considered the submissions and observed that the assessee had indeed filed an estimate under section 212(1) but was penalized under section 273(a) for an untrue estimate. Given this, the Tribunal held that penalizing the assessee again under section 273(c) for failure to furnish another estimate was unjustified. The Tribunal quashed the orders imposing and sustaining the penalty, ruling in favor of the assessee.

5. In conclusion, the Tribunal allowed the appeal by the assessee, holding that the penalties imposed under section 273(c) were unwarranted due to the assessee already being penalized under section 273(a) for furnishing an untrue estimate.