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TMI Blog1990 (11) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of advance tax at Rs. 2,56,250 on the due date. The assessee finally submitted a revised estimate of its current income on 15-3-1982 at Rs. 32 lakhs in form No. 29 and paid the tax of Rs. 16,09,250 on the due date. The income of the assessee was finally assessed at Rs. 31,86,840. Sh. Tandon submitted that, the assessee having submitted its estimate of its current income at Rs. 5 lakhs, revising it to Rs. 10 lakhs and finally at Rs. 32 lakhs, indicate clearly that, the intention was nothing more but to postpone the payment of the tax in the first two instalments and therefore, the provisions of section 216 for the charge of the interest are clearly attracted. He pleaded that, the CIT(A) was clearly in error in coming to the conclusion that the second estimate was in order, because, even that estimate was very much lower than the final estimate and it is not the case of the assessee that, either the first or the second estimate was based on proper material and that the income went up in the last few months of the financial year, which led to the revision of the estimate at a higher figure. He therefore, submitted that, the CIT(A)'s order should be set aside because of the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acility, the sections are reproduced below : Sec. 216 Where on making the regular assessment, the Income-tax officer finds that any assessee has---- (a) under section 209A or section 212 under estimated the advance tax payable by him and thereby reduced the amount payable in either of the first two instalments; or (b) ..........; he may direct that the assessee shall pay simple interest at twelve per cent per annum---- (i) in the case referred to in clause (a), for the period during which the payment was deficient, on the difference between the amount paid in each such instalment and the amount which should have been paid, having regard to the aggregate advance tax actually paid during the year; and (ii) .......... Explanation : For the purposes of this section, any instalment due before the expiry of six months from the commencement of the previous year in respect of which it is to be paid shall be deemed to have become due fifteen days after the expiry of the said six months. Sec. 209A (1)(a) Every person shall, in each financial year, on or before the date on which the first instalment, or........, of advance tax is due in his case under sub-section (1) of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 140A has been paid. This is so obvious for the reason that, in cases of the assessee having opted to file the statement of the income based on the last assessed or the latest return as the case may be, then he would have complied with the provisions as existing in sections 209A and 209 and therefore, for such compliance there could not be any levy of interest. This would not change for the mere reason that the assessee files a higher estimate on the date when the third instalment becomes due and pays the tax on that basis which tax indicates that, the first two instalments are lower, because, such higher estimate has been filed to comply with the provisions of section 212 which require filing of an estimate in the event of the current year's income exceeding the statement by a particular percentage, viz., 33 and one-third per cent. 6. As per sec. 209A(1), the assessee could opt for filing the statement of his current income based on the last assessed income and pay the advance tax on that basis starting from the first date of payment of advance tax. Section 209(1)(d) directs the assessee to check up with the income as returned for the latest previous year, which year i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue and paid one-third of the tax on that date which amount was Rs. 1,02,500. The assessee however made an upward revision on 15-12-1981, i.e., on the date when the second instalment of advance tax due and on this basis, the income estimated was Rs. 10 lakhs and the second instalment of advance tax paid was Rs. 2,56,250. The assessee again made an upward revision on 15-3-1982 at Rs. 32 lakhs and paid the differential tax on that date at Rs. 16,09,250. The income came to be assessed at Rs. 31.87 lakhs. In case the assessee had contained itself with the filing of the statement of current income based on the last assessed income of asst. year 1978-79 because the returned income for asst. year 1981-82 being lower, and paid the first two instalment of advance tax and had filed the upward revision of its income as it had done, the provisions of interest under section 216 would not have been attracted at all. However, the assessee had chosen to estimate the income feeling that its current year's income would be lower than the income based on the last assessed income of asst. year 1978-79 and having paid the advance tax on the date when the first instalment of advance tax was due, which tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made with the third and last instalment, to see if there is any shortfall in the payment of taxes because the third and final instalment of advance tax is expected to be near about the figure of actual tax liability of any assessee and this is always the starting point. As observed earlier, the last estimate of income was at Rs. 32 lakhs, and on this income the total tax liability was Rs. 19.68 lakhs and one-third of this amount would be Rs. 6.56 lakhs and normally the assessee should have paid at least this amount as its first and the second instalments of advance tax. Giving the allowance of just about one-third difference in the income, and the same proportion on tax payable, the tax that should have been paid would have been in the range of little over Rs. 4.58 lakhs each as first two instalments. The assessee had paid Rs. 1,02,500 and Rs. 2,56,250 as the first and the second instalments, which instalments are lower than what should have been otherwise paid by the assessee. It is for circumstances such as the one before us, that, the Legislature has clearly provided for the charge of interest because, the assessee had utilized the funds which funds rightfully belonged to the St ..... X X X X Extracts X X X X X X X X Extracts X X X X
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