9911796707
TMI Blog1989 (7) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... were paid based on this income. On15th March, 1984, the assessee-company had filed Form No. 29 estimating its income at Rs. 18,12,240 and had paid the last instalment of advance tax accordingly. The ITO on completion of the assessment levied the interest u/s 216 of Rs. 16,072 for the reason that the first two instalments of advance tax were lesser than the last instalment, though he did not call upon the assessee-company to explain it. Aggrieved the assessee-company preferred appeal to the CIT(A). The contention of the assessee was that as required by law it had filed the statement of its income in Form No. 28A and had paid the taxes accordingly and therefore no interest could be charged from the assessee. In support of its contention the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Act also provided for filing of a lower estimate of income initially. The Act provided for the estimation of higher income only when the current year's income was more than the income as per Form 28A by 33 and 1/3rd per cent and this estimation was to be done on or before the last instalment of advance tax was due. He accordingly pleaded that the assessee in the instant case having complied with the law literally, interest could not be charged for the mere reason that the first two instalments of advance tax were lower than the last instalment of advance tax. He pleaded that the statement of income and estimate of income are two different and distinct categories recognised by the Act. He pleaded that sec. 216 would get attracted only wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s he receives the said notice and pay the advance tax accordingly. Third, as provided in sec. 212(3A) of the Act, he could pay the first two instalments as per the notice from the ITO and file an estimate of higher income on or before the last instalment of the advance tax and pay the differential tax as the last instalment. The new assessees were required to file their estimate of income only on or before the last date instalment of advance tax. The assessees were allowed to revise the estimate of income for advance tax purposes at any time and pay the tax. The existing assessees who were not served with the notice of advance tax u/s 210 did not pay any advance tax. 5.2 The Legislature wanted to remove this anomaly of existing assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... last returned income in which he had paid self-assessment tax whichever income was higher. In drawing up the statement adjustments were allowed to be made in respect of income from capital gains, winnings from lottery etc. The said statement was required to be filed on or before the first instalment of advance tax was due. The advance tax instalments were to be paid based on this statement of income. Second, he was allowed the option of filing an estimate of lower income of the current year instead of filing the statement of income and pay the advance tax on that basis. Third, he is expected to file an estimate of higher income in case the current year's income exceeded the income as per the statement of income by a specified percent and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of taxes as demanded of him by ITO by virtue of notice u/s 210. The question of comparing the first two instalments of advance tax with the last instalment of advance tax does not arise at all. In situation two it does attract the requisites of comparison to be made of first two instalments with the last instalment of advance for the taxes were paid on the basis of an estimate. In situation three the estimate of higher income on or before the last instalment of advance tax is required to be made only when the difference between the current year's income and the income as stated in the statement of income exceeds the specified percentage. 5.5 Thus it is clear that the requirement of law prior to and after 1-6-1978 would be satisfied if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is applicable when a notice u/s 210 is served on the assessee. In a situation like the one mentioned above alone this section would become operative and in no other. 5.7 We are therefore of the view that in the instant case, the assessee having paid the first two instalments of advance tax based on the statement of income which is as per the initial option allowed to the assessee, it has only complied with the law. Secondly, this statement being not the same as an estimate of income for it does not involve any estimation but only adoption of either the last assessed income or the last returned income. Thirdly, if as a consequence the first two instalments fell short of the last instalment it does not lead to the inference that the advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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