9911796707
TMI Blog1988 (8) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... s 208 to 219 in the case of income except certain incomes mentioned therein. Under section 208, advance tax is payable by a company if its income exceeds Rs. 2,500. Section 209 provides the method for computation of advance tax. Every person, where he has been previously assessed by way of regular assessment, is enjoined, under section 209A, to send a statement of advance tax payable by him computed in the manner laid down in section 209. Where he has not previously been assessed by way of regular assessment, he is required to send an estimate of the current income and advance tax payable by him on the current income calculated in tile manner laid down in section 209 and to pay the advance tax as accords with the estimate in three equal instalments prescribed under section 211 of the Act. As the accounting year of the petitioner ends on March 31, its instalments for the assessment year 1987-88 fell due, the first, on or before September 15, 1987, the second, on or before December 15, 1987, and the third, on or before March 15, 1988. Section 210 empowers the Income-tax Officer to require a person, who has been previously assessed by way of regular assessment, by order in writing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remise that the provisions contained in the newly inserted section 115J were not applicable as per the legal advice and opinion of Mr. N. A. Palkhivala. Along with the estimate, the petitioner submitted letter explaining the said position and annexed therewith the opinion of Mr. Palkhivala. On receipt of the estimate dated March 11, 1988, accompanied by the letter, and the opinion of Mr. Palkhivala, the Income-tax Officer, Central Circle-XVIII, New Delhi, made the impugned order dated March 17, 1988. The relevant portion of this order reads as under : "In this connection, your attention is drawn to the Explanation to section 209A of the Income-tax Act, according to which 'current income' means the total income as defined in section 2(45) of the Income-tax Act. According to section 2(45), the total income means total amount of income computed in the manner laid down in this Act (including section 115J). You are, therefore, requested to make the payment of Rs. 93,12,500. However, you are informed that a refund of Rs. 32,70,981 determined for the assessment year 1984-85 is being adjusted against this demand and the challan is enclosed for the balance demand of Rs. 60,41,519. You ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the petitioner company was bound to pay the instalment of advance tax falling due on March 15, 1988, as per its estimate filed on December 11, 1987." , In the view we are taking, we need not examine, the second ground of attack raised by the petitioner. Without expressing any opinion whatsoever, we shall, for the purpose of disposing this petition, presume that the provisions contained in section I 15J of the Act were attracted and in the revised estimate filed by the petitioner on March 11, 1988, the petitioner had underestimated its income. Mr. Soli Sorabjee, learned counsel for the petitioner, contended that the petitioner, no doubt, on or about December 11, 1987, had filed an estimate computing its income as Rs. 450 lakhs and paid Rs. 93,12,500 by way of advance tax. It was, however, only an estimate, i.e., rough or approximate calculation. After December 11, 1987, and before March 15, 1988, there could intervene many factors justifying revised computation. A person may suffer huge losses during the three months reducing its income to "nil". He may be better advised regarding the method of computation of his income and so on. In any case, section 209A(3) of the Act perm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w our attention to the provisions contained in section 218 of the Act which provided that if an assessee has sent an estimate or revised estimate of the advance tax payable by him but has not paid any instalment or instalments in accordance therewith on the date or dates specified in section 211, he shall be deemed to be an assessee in default in respect of such instalment/instalments. was urged by Mr. Jain that the revised estimate filed by the petitioner on March 11, 1988, was not an estimate in the eye of law as it was accompanied by the letter of the petitioner and the opinion of Mr. Palkhivala. It had not the effect of superseding the estimate filed on December 11, 1987, argued learned counsel, and, consequently, the demand could be raised by the Income-tax Officer on the basis of the estimate filed on or about December 11, 1987. On a careful examination, we do not find any substance in this contention of learned counsel for the respondents. Rule 39 of the Income-tax Rules, 1962, provides as under: "39. Estimate of advance tax. -The estimate which an assessee has to send to the Income-tax Officer under sub-section (1) or sub-section (2) or sub-section (3) or sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... superseded the estimate filed on or about December 11, 1987, and, therefore, the petitioner could not be deemed to be an assessee in default. As a result, the learned Income-tax Officer was not competent to raise any demand or initiate penalty proceedings. The impugned order dated March 17, 1988, copy annexure "F", is liable to be quashed. Mr. Soli Sorabjee, learned counsel for the petitioner, contended that the respondents may be directed to refund Rs. 32,70, 981 which amount had been adjusted in the impugned order. We are afraid, we cannot accede to this request as no such relief has been specifically claimed in the writ petition. In conclusion, we make the rule absolute, quash the impugned order dated March 17, 1988, copy exhibit "F", as well as the show-cause notice dated March 17, 1988, copy annexure "G" issued under section 221 (1) of the Act. Respondents are restrained from taking any action pursuant to the said order as well as the notice both dated March 17, 1988. We may, however, make it clear that this order shall, in no way, stand in the way of the respondents charging interest or initiating penalty proceedings or imposing penalty or taking any other action aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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