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TMI Blog2004 (1) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... est in terms of the provisions of section 234C and the authorities have rightly ordered for payment of interest – petition dismissed - - - - - Dated:- 12-1-2004 - Judge(s) : NAGENDRA RAI., RAJENDRA PRASAD. JUDGMENT The petitioner has challenged the demand of Rs. 2,250, which has been charged as interest under section 234C of the Income-tax Act, 1961, (for short "the Act") for the assessment year 1998-99 by the assessing authority as well as the revisional order passed by the Commissioner upholding the said order. For the assessment year 1998-99, the assessing authority-Deputy Commissioner of Income-tax, Circle-2(1), Patna (respondent No. 2), assessed the petitioner under section 143(3) of the Act by order dated January 4, 2001, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner, in such a situation the direction for payment of interest for short payment of first and second instalments of advance tax is harsh and unjust and that the provision of section 234C(1)(b)(i) of the Act suffers from the vice of unconstitutionality. Learned counsel appearing for the respondent-Department, on the other hand, submitted that the provision for payment of interest for non deposit of advance tax or less deposit of tax in the quarter, as mentioned in section 234C of the Act is compensatory in nature and the provision is also mandatory and the same requires deposit of advance tax on the returned income. The fact that there was unanticipated income in the last quarter of the year cannot be a ground to hold the provision inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an thirty per cent, of advance tax on the returned income is payable on or before September 15, not less than sixty per cent, of advance tax or liability, as reduced by the amount paid in the earlier instalment on or before December 15 and the whole amount of advance tax liability minus advance tax already paid in the earlier instalment or instalments on or before March 15. In case, no advance tax is paid on the returned income or payment is made beyond the aforesaid period or is less than what is required to be paid on the returned income, the assessee shall be liable to pay interest at the rate of one and one-fourth per cent, per month for a period of three months on the amount of shortfall from thirty per cent, or, as the case may be, si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandatory unlike earlier provisions. No discretion is left in the authority to reduce or waive the interest except in those cases in which provision has been made under the Act itself. Section 234C of the Act has no application where short-fall in the making of the deposit by the assessee on the returned income is on account of an underestimate or failure to estimate the amount of capital gains or income of the nature referred to in sub-clause (ix) of clause (24) of section 2 of the Act, which contains a provision with regard to income from any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from any gambling or betting of any form or nature whatsoever. A Constitution Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uching civil liberty and the Legislature should be allowed to have a play in the joints. It is apt to quote the relevant paragraph at page 255 of the said judgment, which runs as follows: "Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion, etc. It has been said by no less a person than Holmes J., that the Legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in the case of legislation dealing with economic matters, where, having regard to the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpreted experience'. Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and, therefore, it cannot provide for all possible situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture v. Central Reig Refining Co. [1950] 94 L. Ed. 381, be converted into Tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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