1992 (9) TMI 147 - AT - Income Tax

Summary

Issues:
1. Penalty under section 273(1)(b) for failure to furnish an estimate of income for advance tax.
2. Interpretation of provisions under section 273(1)(b) and section 209A(1)(a) of the Income Tax Act.
3. Validity of penalty levied by the Assessing Officer.
4. Distinction between penalty provisions under section 221 and section 273(1)(b) of the Income Tax Act.

Detailed Analysis:
The appeal before the Appellate Tribunal ITAT Madras-A involved the issue of penalty under section 273(1)(b) for the failure of the assessee, a firm, to furnish an estimate of income for advance tax for the assessment year 1982-83. The assessee initially filed an estimate of income at Rs. 70,000 and later revised it to Rs. 85,000 but did not pay the tax accordingly. The Income-tax Officer imposed a penalty of Rs. 6,000 under section 273(1)(b) despite the assessee's argument that no penalty was applicable as estimates were filed (paragraphs 2-3).

The first appellate authority upheld the penalty, emphasizing the importance of paying tax as per the estimate filed by the assessee to fulfill the purpose of advance tax provisions (paragraph 4). The assessee, represented by Shri Devanathan, argued that since estimates were filed, the penalty under section 273(1)(b) should not apply as it pertains to cases of failure to file a statement of advance tax payable without reasonable cause (paragraphs 6-7).

The Appellate Tribunal considered the provisions of the Income Tax Act related to tax collection and recovery, highlighting the distinction between "collection" and "recovery" of tax. It pointed out that penalty provisions for default in tax payment are under section 221, not section 273(1)(b) which deals with failure to file a statement of advance tax payable (paragraphs 11-13). The Tribunal concluded that the penalty under section 273(1)(b) was not validly levied and canceled it, noting the difference in penalty quantum under section 221 and section 273(1)(b) (paragraphs 13-14).

The Tribunal rejected the Department's reliance on a previous order, emphasizing the specific nature of the penalty provisions and the incorrect application of section 273(1)(b) in the present case. Ultimately, the assessee's appeal was allowed, and the penalty under section 273(1)(b) was canceled (paragraph 15).