9911796707
TMI Blog1990 (6) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... estimated the tax at Rs. 17,550. The assessee filed another estimate on March 30, 1968, estimating the tax at Rs. 6,32, 500. The Income-tax Officer pointed out that the latter estimate was invalid, having been filed beyond March 15, 1968. The Income-tax Officer initiated penalty proceedings under section 274 read with section 273(a) of the Act and issued a notice. The assessee filed a reply dated February 1, 1974, stating that as per the revised estimate, the income was shown at Rs. 11,50,500, that the tax thereon amounted to Rs. 6,32,500 and that the same was paid before November 4, 1968. It was further stated that the tax as above was paid as advance tax and the same should not be ignored. The Income-tax Officer pointed out that payment of tax made in accordance with the valid estimate alone would be taken as advance tax, that the payment made on the basis of the estimate dated March 30, 1968, could not be taken as advance tax and that, therefore, the valid estimate sent on June 14, 1967, was an underestimate. The Incometax Officer computed the shortfall at Rs. 3,21,161 and imposed a penalty of Rs. 32,116 under section 273 (a) of the Act. On appeal, it was argued before the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment made in pursuance of the invalid estimate cannot be treated as advance tax. According to learned standing counsel, the payment of Rs. 3,20,000 made on March 30, 1968, could not be held as advance tax paid under Chapter XVII-C of the Act since that amount was paid on an invalid estimate filed on March 30, 1968. Learned standing, counsel pointed out that, if the amount paid on the invalid estimate is ignored, then there is a shortfall of Rs. 3,21,161 and, therefore, the penalty is exigible under section 273(a). Learned standing counsel further pointed out that the fact that in the assessment proceedings, the Department accepted the payment made on the invalid estimate as advance tax paid within the end of the financial year would not mean that the said payment should also be accepted as advance tax paid under Chapter XVII-C. Learned standing counsel submitted that, if this interpretation is accepted as the correct interpretation, then the very purpose for which section 273(a) was introduced would get frustrated. It was, therefore, pleaded that the Tribunal was not correct in upholding the order of the Appellate Assistant Commissioner. On the other hand, learned counsel appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reat it as payment not made under the provisions of Chapter XVII-C in the penalty proceedings. From a reading of the relevant provisions of section 273(a)(i) of the Act, it is clear that the penalty under section 273(a) of the Act could be imposed only on the amount by which the tax actually paid during the financial year immediately preceding the assessment year falls short of 75% of the assessed tax or when a notice under section 210 of the Act was issued to the assessee for the amount payable thereunder. Therefore, if the Income-tax Officer, in the course of any proceedings in connection with the regular assessment for any assessment year, is satisfied that any assessee has furnished under clause (a) of sub-section (1) of section 209, statement of the advance tax payable by him which he knew or had reason to believe to be untrue, he can levy penalty. The burden of proving that an estimate of advance tax submitted by an assessee was false to his knowledge or believed by him to be inaccurate is on the Department. According to the Income-tax Officer in the present case, the payment made in accordance with the valid estimate filed on June 14, 1967, alone could be taken as advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is made should be taken as advance tax. In that case, this court held that (at p. 351) "When once the payment of the tax paid as advance tax is accepted, the payment cannot be said to be not towards advance tax. Any payment made before the end of accounting year for which the assessment has been made should be taken to be an advance tax." In a similar situation in Addl. CIT v. Chitra Sagar [1980] 121 ITR 699, this court has specifically held that so long as the amount of advance tax is paid, though belatedly, but within the end of the accounting year, it will have to be taken as advance tax for the purpose of section 214 of the Act as, otherwise, credit cannot be given to that sum at the stage of the assessment under section 214. Similar view was also taken by the Gujarat High Court in the case of Chandrakant Damodardas v. ITO [1980] 123 ITR 748. In this decision, the Gujarat High Court explained the circumstances under which the decision in the case of Bharat Textile Works v. ITO [1978] 114 ITR 28 (Guj), was rendered. While rendering the decision in CIT v. T. T. Investments and Trades P. Ltd. [1984] 148 ITR 347, this court followed various judgments rendered in the case of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was held liable to pay penalty under section 273 of the Incometax Act, 1961." On these facts, the Gujarat High Court held as under "that having regard to the tenor and tense of the language used in section 273(b) read with section 273(ii), the crucial date for levy of penalty cannot be the date of default as contended on behalf of the Revenue. The basis of penalty under section 273(ii) is the amount on which interest is payable under section 217. On the date of default there was no amount on which interest was payable under section 217, because under section 217(1), interest payable in case of default for not filing return as required by section 212(3) is to commence from the 1st day of April next following the financial year in which advance-tax was payable and it is to run up to the date of regular assessment. Therefore, the basis of penalty, as prescribed under section 273(ii), being the amount on which interest is payable under section 217, the date with reference to which penalty is to be levied cannot be the date of default." This decision was rendered under section 273(b). This decision was followed by the Tribunal in accepting the contentions put forward by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is circumstance. We only wish to emphasise the fact that every care and caution must be taken by the Department to see that the provision is not used against the assessee as an instrument of oppression. The proceedings are of a quasi-judicial character and it is unnecessary to point out that the authorities must act in a fair and unbiased manner. The accusation against the assessee is in the nature of a criminal charge and it is obvious that the guilt must be brought home to him by adopting the standard of proof, as far as may be possible, requisite to sustain a conviction in a criminal court." We have considered the decisions cited before us. The question that now remains to be considered is whether the advance tax paid belatedly but within the financial year immediately relevant to the assessment year under consideration can be taken as advance tax paid in pursuance of the provisions contained in Chapter XVII-C. The fact remains that the sum of Rs. 3,20,000 paid as advance tax according to the estimate filed on March 30, 1968, was accepted as advance tax and given credit for under section, 219 by the Income-tax Officer in the assessment proceedings. A careful perusal of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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