9911796707
TMI Blog1986 (1) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... been previously assessed by way of regular assessment under the Act. The returned income was accepted in the assessment. The reason for filing the estimate of income for the purposes of advance tax on 16-3-1981 was due to the intervening holdings on 14-3-1981 and 15-3-1981. However, the tax was already paid before 15-3-1981. The demand notice served on the assessee contained levy of interest under section 217 of the Act. 3. Shri Dewani, the learned counsel for the assessee vehemently argued that the assessee had complied with the provisions of section 209(A)(1)(b) and, therefore, there was no liability to pay interest under section 217; though the estimate was filed on 16-3-1981, because of the intervening holidays on 14-3-1981 and 15-3-1981 the estimate should be deemed to have been furnished on time in terms of the General Clauses Act, 1897. Therefore, there was no default on the part of the assessee and only when there was default under section 209A(1)(b), section 217 is attracted. He also pleaded that the assessee had not only filed the estimate but had also paid the advance tax thereon. Section 217 envisages levy of interest only when no estimate was furnished to the income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ast instalment of advance tax is due. Such the assessee should also pay the tax on or before the date on which the last instalment of advance tax is due. In the instant case, the assessee has not been previously assessed to income-tax. The last date on which the estimate of current income and payment of advance tax thereon should have been made was 15-3-1981. In view of the intervening holidays on 14-3-1981 and 15-3-1981 the estimate was filed with the income-tax authority on 16-3-1981 and payment of advance tax thereon was already made before 15-3-1981. In the circumstances, we hold that the estimate of advance tax under section 209A(1)(b) was filed on the due date. As the advance tax was also paid before the due date, there was no default on the part of the assessee in terms of section 209A(1)(b). 6. It is seen from the assessment order that the ITO had not specifically mentioned the levy of interest under section 217. However, it is also a fact that interest under section 217 was levied in the demand notice accompanying the assessment order, and, therefore, there is no merit in the contention of the departmental representative that the levy of interest under section 217 was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ambit of section 246(1)(c) is the question to be examined in the light of judicial pronouncements cited by both the parties. The Bombay High Court in Daimler Benz A.G.'s case had to consider the case of a non-resident who was not at all liable to pay any advance tax and in that case their Lordships decided that an appeal would be maintained against the levy of interest under section 18A(8) of the Indian Income-tax Act, 1922 ('the 1922 Act'). 9. In the instant case, the assessee is liable to pay advance tax and, therefore, the facts of the case are distinguishable from the one considered by the Bombay High Court mentioned above. The provisions governing advance tax as found in section 18A(1) to (8) of the 1922 Act and the provisions of advance tax as contained in sections 207 to 219 have undergone a sea-change under the 1961 Act as it stood in the relevant assessment year. The introduction of section 209A is an innovation and shifted the burden of filing the advance tax statement or estimate and paying the tax thereon to the assessee without waiting for any order being issued under section 210. Keeping in view the changes that have been made on account of the insertion of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the return was not belated or that the penal provision was not attracted at all to his case. In such a case also he denies his liability to be assessed to interest. But where the assessee does not deny his liability to be assessed to interest, but his objection relates to the question of waiver or reduction of interest under rule 117A or rule 40 of the Income-tax Rules, 1962, as the case may be, such objection does not amount to denial of liability to pay interest under section 139 or section 215 of the Act. Waiver or reduction of interest presupposes that the liability has been incurred by the assessee. If no liability has been incurred, then there is no question of exercise of discretion of waiver or reduction of interest. In those cases, the assessee admits his liability but contends that in the proper exercise of discretion, the income-tax Officers should have waived or reduced the interest ; that objection does not amount to denial of liability to be assessed." 10. No appeal is specifically prescribed under section 215 as also under section 217 and the ratio of the decision of the above case under section 215 is equally applicable to cases under section 217. As discusse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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