9911796707
TMI Blog1980 (8) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ar was less than the tax calculated at the rates of tax in force in the financial year in which the advance tax was payable, the Tribunal was right in holding that the difference between the taxes calculated at the rates of tax in force, in the said years was not due to variations in the rates of tax within the meaning of section 215 of the Income-tax Act, 1961, and in that view holding that there was no shortfall in the payment of the advance tax on which any interest could be charged under the said section ? " The assessee is a limited company. The assessment year involved is 1965-66 for the year ending 31st of March, 1965, as the previous year. The ITO made a demand under s. 210 of a sum of Rs. 9,06,920.85 by notice of demand dated 2nd January, 1965. During the financial year ending 31st of March, 1965, the assessee paid a sum of Rs. 7 lakhs as advance tax under s. 212 on its own estimate. The regular assessment for 1981] C. I. T. V. SHREE HANUMAN COTTON MILLS LTD. (Cal.) the assessment year 1965-66 was completed on 10th March, 1970, resulting in a demand of Rs. 8,91,407. The ITO did not direct, in his assessment order or elsewhere, that interest under s. 215 be charged on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income regularly assessed at the rate for the preceding year was not accepted by the Tribunal. Accordingly, the Tribunal held that the matter was beyond reasonable doubt and the benefit, in any event, should go to the assessee. The Tribunal, therefore, upheld the contention of the assessee and cancelled the order of the Addl. Commissioner dated 28th January, 1972. Upon these, under s. 256(1) of the I.T. Act, 1961, the questions, mentioned hereinbefore, have been referred to this court. Before we proceed to consider the contentions, it would be necessary to refer to the actual terms used in s. 215. Section 215 has subsequently undergone modification. But as it stood at the relevant time prior to its amendment was as follows: " Where in any financial year an assessee has paid advance tax under section 212 on the basis of his own estimate, and the advance tax so paid is less than seventy-five per cent. of the tax determined on the basis of the regular assessment (reduced by the amount of tax deductible in accordance with the provisions of sections 192 to 194, section 194A and section 195) so far as such tax relates to income subject to advance tax and so far as it is not due to var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on regular assessment from the 1st day of April next following the said financial year to, the date of the regular assessment for the assessment year immediately following the said financial year, and where any such instalment was paid after the expiry of the financial year during which it was payable by reason of the provisions of s. 213, interest as aforesaid should also be payable on that instalment from the date of its payment to the date of regular assessment. Section 215, as we have mentioned and as it stood at the relevant time, imposes an obligation for payment of interest by the assessee. This, according to the learned advocate for the revenue, is a statutory obligation, for payment of interest for non-compliance with certain conditions contemplated by that section and obligation to pay tax at the rates prevalent at the time when the advance tax was due to be paid. Learned advocate for the revenue drew our attention to the expression " due to variation in the rates of taxes According to him, the expression, " variation in the rates of taxes indicated both reduction as well as excess. The expression " variation was defined in the dictionary including the Oxford Dictionary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and if after the regular assessment is made the tax paid in advance is found to be in excess of the tax payable, the assessee would be entitled to a refund of such excess. Further, it is worthy of note that the provision for advance payment of tax under section 18A is only in respect of income from which the tax is not deductible at the source under section 18." In our opinion, in order to construe the effect of this section, we must bear in mind that the obligation to pay interest arises only if there is difference between the tax paid under s. 212 on the basis of his own estimate and the advance tax so paid is less than 75 per cent. of the tax determined on the basis of regular assessment (underlined by us). Therefore, in order to attract the provisions of that section, the advance tax so paid must be less than 75 per cent. of the tax determined on the basis of regular assessment. The regular assessment of tax can only be determined with reference to the rates prevalent in the assessment year and it was not a tax assessable at the rate in the financial year but it would be an assessment made on the basis of regular assessment. Then, the section contemplates that it will be redu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligation to pay interest was imposed upon the Government under s. 214 of the Act and if the obligation was to pay tax by the assessee on the basis of the rate prevalent in the financial year only, then there was no point in imposing an obligation on the Government by s. 214 to pay interest on the amount paid by the assessee. It is true that the expression variation " could mean both reduction and increase. But the expression due to variation " used in this section related to the expression " it " which again must be related to " such tax " which must be referable to the tax determined on the basis of the regular assessment. In support of the contentions that this expression should be construed in its ordinary meaning, learned advocate for the revenue drew our attention to the observations of the Supreme Court in the case of Board of Revenue v. A. P. Benthal, AIR 1956 SC 35, where the Supreme Court emphasised that where different expressions were used in the same statute they should be so construed as to convey the same meaning in a particular section. That is a principle which must always be borne in mind in construing a provision of this nature. Even if the expression " variation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression that the assessee should be liable for interest and penalty only if his estimate turned out to be less than 75 per cent. of the tax eventually assessed. Therefore, this obligation to pay interest as well as the penalty was sought to be passed on the assessee if the tax paid was less than 75 per cent. of the tax " eventually assessed ". Therefore, it has to be borne in mind that with a view to facilitating the collection of the tax " eventually assessed ", that is to say, the tax which is assessed at the rate prevalent for the assessment year, the difference must be calculated. If we bear that in mind then, in our opinion, the construction put by the Tribunal is the only reasonable and plausible construction in this case. Certain arguments were advanced before us on the aspect of the Tribunal's reasoning that where there was a penal provision and there was any question of doubt, it should be resolved in favour of the assessee. Our attention in this connection was drawn to the observations of the Supreme Court in the case of Gursahai Saigal v. CIT [1963] 48 ITR 1 (SC), where the learned judge, delivering the judgment, referred really to the construction and applicabil ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
