1964 (5) TMI 1 - HC - Income Tax

Legality of a notice issued by the Income-tax Officer for the payment of advance tax under the provisions of section 210

Summary

Issues Involved:
1. Legality of the notice dated January 30, 1963, under Section 210 of the Income-tax Act, 1961.
2. Validity of demanding the entire advance tax by March 1, 1963, in contravention of Section 211(1) of the Income-tax Act, 1961.
3. Effect of the provisional assessment made after the filing of the writ petition on the validity of the advance tax notice.

Detailed Analysis:

Issue 1: Legality of the Notice Dated January 30, 1963, Under Section 210 of the Income-tax Act, 1961
The petitioner contended that the notice of demand dated January 30, 1963, was illegal because it was based on an assessment order dated December 31, 1962, which was alleged to be a provisional assessment and not a regular one. The court examined the nature of the assessment order dated December 31, 1962. The petitioner argued that the use of the word "provisional" in the assessment order indicated it was not a regular assessment. However, the court clarified that the assessment order dated December 31, 1962, was indeed a regular assessment for the year 1958-59 and not a provisional one. The court noted that the term "provisional" was used because the assessment of the petitioner's share in certain firms was pending, and the Income-tax Officer had no alternative but to make a provisional determination of that share. The court cited precedents, including the Supreme Court's decision in Second Additional Income-tax Officer, Guntur v. Atmala Nagaraj, and a Bench decision in Dharam Vir Virmani v. Commissioner of Income-tax, to support its conclusion. Therefore, the court found no merit in the petitioner's contention regarding the illegality of the notice.

Issue 2: Validity of Demanding the Entire Advance Tax by March 1, 1963, in Contravention of Section 211(1) of the Income-tax Act, 1961
The petitioner argued that the notice was invalid because the income-tax authorities demanded the payment of the entire advance tax by March 1, 1963, instead of March 15, 1963, as per the proviso to Section 211(1) of the Income-tax Act, 1961. The court examined the provisions of Section 211 and noted that the petitioner had raised this objection before the income-tax authorities, who had responded by stating that the advance tax for the share of income ending after December 31 was payable by March 15, while the tax for the remaining income was payable by March 1. The authorities had even allowed the petitioner to pay the entire demand by March 15 to avoid unnecessary controversy. The court found no legal provision or precedent to support the petitioner's contention that the department could not change the date of payment. The court also noted that this point was not initially raised in the writ petition but was later included in the replication. Consequently, the court found no basis for interference on this ground.

Issue 3: Effect of the Provisional Assessment Made After the Filing of the Writ Petition on the Validity of the Advance Tax Notice
The petitioner argued that the provisional assessment made on January 15, 1964, for the financial year 1962-63 rendered the advance tax notice dated January 30, 1963, infructuous. The court examined the timing and legal implications of the provisional assessment. It noted that the advance tax notice is issued during the financial year, while the provisional assessment is made in the subsequent assessment year after the assessee submits their return. The court found no provision of law or judicial decision to support the petitioner's claim that the provisional assessment invalidated the advance tax notice. The court emphasized that the petitioner had become an assessee in default long before the provisional assessment was made. Therefore, the court found no merit in this contention as well.

Conclusion
The court dismissed the petition, finding no merit in any of the contentions raised by the petitioner. The court also noted the petitioner's conduct in delaying the payment of tax and failing to avail the statutory remedies provided under the Income-tax Act. Consequently, the writ petition was dismissed without any order as to costs.