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TMI Blog2005 (10) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Tribunal dated August 10, 1988 in relation to the assessment year 1980-81. The question referred is as under: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that interest under section 217 was not leviable for failure to revise the statement of income under section 209A(4), ignoring the clear provisions of section 209A(1) to the effect that statement of advance tax is required to be sent if the current income is likely to exceed Rs. 2,500 in company cases, as per section 208(2)?" Facts: The essential facts found by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal are as under: An assessment in the case of the respondent-assessee for the assessment year 1978-79 was completed on a total income of Rs. 16,79,938, after June 15,1979; i.e., after the last date on which the assessee was required to file the statement of its income exigible to advance tax in terms of the provision of section 209A for the assessment year 1979-80. The assessee did not pay advance tax during the financial year 1979-80. However, the assessee chose to file Form No. 28A, showing a loss of Rs. 2,500. This w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest under section 217 is not in order and the Income-tax Officer has not applied his mind to the facts of the case properly and the levy was bad in law." The Commissioner of Income-tax (Appeals) was, thus, pleased to allow the appeal filed by the respondent-assessee vide its order dated December 13, 1984. The Revenue, not satisfied with the aforesaid order filed an appeal before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal was pleased to record the following concession given by the parties to the appeal during the course of hearing: "Before us, both the parties agreed that we should consider the case as levy of interest is under section 217 and not 215." The parties reiterated their respective submissions which were advanced before the Commissioner of Income-tax (Appeals). The Income-tax Appellate Tribunal, after hearing the parties, was pleased to rely on the Commissioner of Income-tax (Appeals) reasoning making it clear that the order directing cancellation of interest and reasons mentioned by the Commissioner of Income-tax (Appeals) in support of his order were quite valid. The Tribunal while holding the appeal maintainable was pleased to affirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he financial year. In the submission of learned counsel for the Revenue, the Commissioner of Income-tax (Appeals) has wrongly held that levy of interest under section 217 was erroneous. Alternatively, learned counsel appearing for the Revenue submits that the crux of the issue is: what meaning is to be assigned to the words "where he has not been assessed by way of regular assessment under this Act." Counsel while recapitulating the submissions of the assessee, submits that according to the assessee, those words would mean the assessee who had never been assessed under the provisions of the Act. To put it differently, that person would fall in those words, who is an absolutely fresh and new assessee for the first time coming within the mischief of the Act and not that person who had been once assessed under the Act. To counter this submission, learned counsel for the Revenue submits that while interpreting the words referred to hereinabove, it cannot be understood to exclude the assessee, who had filed his return of income for the previous assessment year but has not been assessed for that assessment year under the provisions of the Act. Learned counsel for the Revenue whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vance tax under sub-section (1) and in such cases the assessees have to send a revised estimate if the current income to be estimated by the assessee exceeds the advance tax payable by more than 33 1/3 per cent. If the advance tax payable is "nil" then no statement is required to be furnished, as such there can be no question of the current income being likely to exceed by 33 1/3 per cent, of nil or loss figure. In her submission, thus, it is clear that no advance tax is payable by the assessee in the first instance by virtue of sections 209 and 209A. If the assessee is not required to send any statement, then there is no further obligation to file a revised estimate since no statement was required to be filed in the first case. According to Ms. Jagtiani, in the Bombay High Court decision in the case of Patel Aluminium P. Ltd. reported in [1987] 165 ITR 99 Justice Bharucha while analysing the scheme of section 209A at page 103 of the judgment has clearly laid down as follows: "The question really boils down to an interpretation of the words 'a statement of advance tax payable by him computed in the manner laid down in' section 209(1)(a). Under section 209A(1)(a), the obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 1980-81 could be taken into account in considering the liability of the assessee to send a statement. It was the Revenue's case that that the provisions of section 209A would be attracted to the facts of the case. However, the Calcutta High Court while dealing with the issues involved in the case has held as follows: "Thus, sub-section (4) will only be attracted if an assessee is liable to pay advance tax under sub-section (1), but, as we have already indicated in the instant case, on the basis of the facts prevailing in the financial year relevant to the assessment year of the assessee, the assessee had no obligation to furnish a statement of advance tax under section 209A(1)(a) and as such sub-section (4) of section 209A cannot be pressed into service. That apart, the question referred to us does not cover the point raised by Mr. Bagchi. We have already set out the question which only deals with the obligation of the assessee to furnish a statement in terms of section 209A(1)(a)." The above decision has been followed by the Calcutta High Court in Director of Income-tax (Exemption) v. Shree Sitaram Public Charitable Trust [1994] 207 ITR 1087 and also referred to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection provides for computation of advance tax payable by an assessee and lays down the basis as being the total income of the latest previous year in respect of which the assessee has been assessed by way of regular assessment and provides for certain deductions and exclusions therefrom. It is thus clear that section 208(1) refers to sub-clause (i) of clause (a) of section 209 which in turn refers to the total income of the latest previous year. The reference in section 208(1) is only to sub-clause (i) of clause (a) of section 209. This section does however provide in sub-clause (iv) that it is the net amount of income-tax calculated on such income assessed by way of regular assessment payable but that however is subject to clauses (c) and (d) of section 209. Clause (c) provides for the case where the estimate or revised statement has been sent by the assessee either under section 209A or section 212 then the income so estimated be substituted for the total income referred to in clause (a). Clause (d) provides that if the assessee has paid tax by way of self-assessment under section 140A for a year later than the previous year referred to in clause (a) and such income exceeds the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment. In the case of such assessees the Income-tax Officer can make an order in writing requiring the assessee to pay advance tax to be determined in accordance with the provisions of sections 207, 208 and 209 and the notice of demand accompanying his order has to specify the instalment in which the advance tax is payable. Sub-section (3) provides that the Income-tax Officer prior to 15 days from the date of last instalment taking into account the tax paid under section 140A or any later amendment order requiring the assessee to pay the advance tax. Instalment of advance tax: 211: This section provides that the advance tax is payable in three instalments on June 15, September 15 and December 15. Estimate by assesses: 212(1): This section refers to an assessee who has received an order under section 210 and estimates that the tax due in his case would be less than the amount that he is required to pay under such an order, then he has the option to send an estimate and pay tax in accordance with that estimate and sub-section (2) gives him the option of a further estimate in such a case. Interest payable by assessee: 215 provides that if an assessee, who has paid adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the latest previous year in respect of which he has been assessed by way of regular assessment and the second base would be the total income of the latest previous year by way of self-assessment under section 140A of the Act. In other words, for the purpose of computing the starting point of advance tax payable for a particular year, an assessee is required to adopt one of the two bases, namely, the one which is higher: either the total income assessed for the latest previous year by way of regular assessment, or the total income as shown in the return of income which is accompanied by self-assessment tax, and such return of income is relatable to the latest previous year as well as being later in point qua the year for which assessment is completed. Applying the aforesaid scheme of the Act to the facts of the case, it is seen that the assessment for the assessment year 1977-78 was completed after June 15, 1979, i.e., after the date on which the assessee was required to file the statement of his income under the provisions of section 209A. The income of the assessee was a positive income for the assessment year 1977-78. The first instalment was due on September 15, 1981. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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