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TMI Blog1991 (9) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause of financial stringency the advance tax and self-assessment tax could not be paid and consequently the assessee could not attach the challans of payment of advance tax and self-assessment tax along with the return as enjoined by section 139(9) of the Act. In this regard, reliance was placed on the Tribunal's decision in the case of Hazarimal Lalooram v. ITO [1985] 21 TTJ (Jp.) 393. It was pointed out that (as per page 32 of the assessee's compilation) self-assessment tax amounting to Rs. 24,495 was paid on13-5-1983and within 4 days, the return of income was submitted. 4. The second submission of the Learned Counsel was that the assessee had furnished an estimate of advance tax on 15-6-1981 estimating its income at Rs. 18,00,000 and revised its estimate on 15-12-1981 estimating its income at Rs. 60,00,000 on which advance tax payable worked out to Rs. 36,90,000. According to the Learned Counsel, advance tax amounting Rs. 22,15,000 was paid in instalments upto31-3-1982and thereafter certain amounts aggregating to Rs. 14,75,000 we re paid towards advance tax upto7-2-1983. It was submitted that the assessment was made on 22-6-1985 and thus the amounts towards advance tax aggre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Reliance was placed on the decision of Andhra Pradesh High Court in CIT v. P. Ramagouda Satyam Reddy Co. [1988] Taxation 88(3)-201 for the proposition that for the purposes of levy of penalty under section 271(1)(a), only the advance tax paid in the financial year could be taken into consideration. It was also pointed out that the judgments relied upon by the Ld. Counsel for the assessee were in respect of interest under section 214 or section 215 and not under section 271(1)(a) of the Act. It was further submitted that while interest was compensatory in nature, penalty was for purposes of deterrence and in that view of the matter the payments made beyond the close of the financial year could not be considered as payments towards advance tax. He strongly supported the order of the CIT(Appeals) and submitted that the penalty had been rightly confirmed. 6. We have carefully considered the rival submissions as also the facts on record. Penalty under section 271(1)(a) is leviable @ 2% of the " assessed tax " for every month during which the default continued. As per Explanation to section 271(1), " assessed tax " means " tax as reduced by the sum, if any, deducted at s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit and Loss A/c with the return, it could be said that he was prevented by sufficient cause for late submission of return. 8. We have given a very careful consideration to the arguments of the Ld. Counsel for the assessee, but do not find any force in the same. As rightly pointed out by the Ld. D.R., clause (c) of Explanation to section 139(9) uses the expression " tax, if any " claimed to have been at source or in advance or on self-assessment. In other words, if the assessee claims to have paid any tax either at source or by way of advance tax or on self-assessment, but does not attach proof of having made such payments then the return could legitimately be treated as invalid, if the assessee did not remove the defect within 15 days of the receipt of the intimation from the Assessing Officer. The bare reading of the Explanation to section 139(9) leaves us in no doubt that what is expected of the assessee is to attach challans of payments which are claimed to have been made by the assessee and not in respect of payments which should have been made were not made by the assessee. If the assessee had not made any payments which he should have made and has not attached a challan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as payment of tax under Chapter XVII-C and given credit for. This clearly shows that for purposes of Explanation to section 271(1), the amounts recovered from the assessee towards advance tax had to be treated as advance tax paid under Chapter XVII-C of the Act. 10. As stated earlier, the assessment in the case of the assessee was made on26-2-1985. That was, in our opinion, the first event which could be said to have changed the character of the payment towards advance tax because it was on the happening of this event that the transformation in the character of advance tax took placed and the advance tax paid could be treated as a payment of tax for the relevant assessment year. Support for this proposition is derived from the Delhi High Court decision in National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India [1981], 130 ITR 928. 11. Previously there was some debate as to whether the payments of advance tax made after the due dates of instalments, but before the expiry of the financial year could be considered as payments towards advance tax. This debate has now ceased to exist with the pronouncement of judgment by the Supreme Court in CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration the entire facts and circumstances of the case, we have no doubt in our mind that the payments aggregating to Rs. 14,75,000 though made or recovered after 31-3-1982 but before the filing of the return and much before the completion of regular assessment were payments towards advance tax and were covered by Chapter XVII-C of the Act. When the Andhra-Pradesh High Court decided the case of P. Ramagouda Satyam Reddy Co. on19-11-1987, the decision of the Supreme Court in the case of Kohinoor Flour Mills (P.) Ltd. decided on22-11-1990was not available. The reliance by the Ld. Counsel for the assessee on the Karnataka High Court decision in the case of Bangalore Animal Food Corpn. Ltd. is also well-placed. In that case, it was hold that delayed payment of advance tax did not lose its character as an advance payment. Similarly, the Rajasthan High Court in the case of Jaipur Udyog Ltd. has hold that the amount of Rs. 11,00,000 directed to be paid as advance tax by the Supreme Court in November, 1965 i.e., after the expiry of the financial year retained the character of advance tax payment. 12. In view of the above discussion, we hold that the assessee was entitled to get cre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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