1992 (11) TMI 154 - AT - Income Tax

Summary

Issues:
1. Imposition of penalty under section 273(1)(b) of the Income-tax Act for failure to file a statement of advance tax.
2. Interpretation of provisions of section 209A(1)(a) and section 209 in relation to the requirement of filing a statement of advance tax.
3. Consideration of whether penalty under section 273(1)(b) is exigible when penalty under section 271(1)(c) for concealment of income has been imposed.

Detailed Analysis:
The judgment pertains to an appeal against the imposition of a penalty under section 273(1)(b) of the Income-tax Act. The assessee, an individual, had filed a return showing a loss for the assessment year 1979-80, but the assessment was made on an income figure due to additions made for inflation of purchases. As the assessee had not paid any advance tax, the Income-tax Officer sought an explanation for not filing a statement of estimate of income. The assessee argued that he could not anticipate the additions made in the assessment and had carried forward losses, which, if considered, did not necessitate the filing of an advance tax statement. However, the Income-tax Officer disagreed, stating that the assessee should have known the actual income reflected in the assessment and thus failed to comply with the advance tax filing requirement.

In the subsequent appeal, the assessee contended that the penalty under section 273(1)(b) was not applicable as the conditions under section 209A(1)(a) had not been met, despite the confirmed additions and penalty for income concealment under section 271(1)(c). Conversely, the revenue argued that since the assessee knew the actual income concealed, it implied a failure to pay legitimate advance tax. The Tribunal analyzed the provisions of section 273(1)(b) and section 209A(1)(a), which mandate filing advance tax statements if the current income exceeds specified amounts. The Tribunal noted that the assessee's latest assessments and subsequent returns reflected losses, indicating no liability for advance tax payment. The Tribunal emphasized that penalizing the assessee for not estimating income, which was not required by statute, was unjustifiable. While the assessee faced penalties for income concealment, the Tribunal ruled that the failure to file an advance tax statement, reflecting only losses, did not warrant penalty under section 273(1)(b). Consequently, the imposed penalty was revoked, and the appeal was allowed.