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TMI Blog1983 (10) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was served with a notice of demand under section 210 of the Act during the financial year 1976-77, asking for payment of advance tax amounting to Rs. 7,59,290. The company filed an estimate in terms of sub-section (1) of section 212 of the Act on 14-6-1976 declaring 'nil' income of nil tax. Accordingly, the assessee paid no tax in respect of the aforesaid financial year corresponding to the assessment year 1977-78. 3. When the assessment was completed, the ITO found the assessed tax to be Rs. 12,49,561 (Rs. 13,12,690---Rs. 63,129 being tax deducted at source). Inasmuch as the 75 per cent of the aforesaid assessed tax was more than the tax paid by the assessee, the ITO charged interest from the assessee in terms of sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d out, inter alia, that "section 215 simply states that if in a financial year an assessee had paid advance tax on the basis of his own estimate and if the advance tax so paid is less than 75 per cent of the assessed tax, then simple interest at the rate of 12 per cent per annum shall be charged from the first day of April next following the next financial year. There is nothing in the section to suggest that interest should be charged if the short payment on the part of the assessee is without any reasonable cause, or if there is deliberate under payment of advance tax ". 6. The learned Commissioner (Appeals) also examined the facts of the case of Bharat Machinery & Hardware Mart and held that the facts of the said case were altogether di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of charging interest under it, the ITO has first of all to find out whether the assessee filed an estimate of advance tax under section 212, and if so, did he make the payment of advance tax on its basis? If so, he has to find out as to what was the assessed tax and then ascertain whether the tax paid by the assessee in accordance with his own estimate, was less than 75 per cent of the assessed tax. If so, interest has to be charged from the assessee on the difference. The section does not refer anywhere to the motive of the assessee in filing the estimate under section 212 at a given figure nor there is any obligation under sub-section (1) of section 212, under which the assessee had filed his estimate of advance tax, that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said sub-section, interest is chargeable under it for the failure of the assessee to send the estimate referred to in sub-section (3A) of section 212. In this sense, the aforesaid sub-section (1A) is penal in nature and provides one of the sanctions to ensure compliance with the provisions of sub-section (3A) of section 212. The other sanction has been provided for by clause (c) of sub-section (2) of section 273 of the Act. Section 215, in contrast, is not a sanction against the not filing of the estimate of advance tax. As noted earlier, filing of an estimate under sub-section (1) of section 212 is purely optional and, therefore, there could naturally be no penal consequence for not opting for the filing of an estimate of advance tax under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, he did file an estimate of advance tax under sub-section (1) of section 212, saying that it had to pay no tax by way of advance tax. Ultimately, the assessed tax was found to be much higher. This being so, on the difference between the 75 per cent of the assessed tax and the tax paid by the assessee (which in the present case happened to be nil) interest was clearly chargeable under sub-section (1) of section 215 and, the ITO in our opinion, rightly charged it. 10. The decision of the Hon'ble Gujarat High Court, relied upon by the assessee, is in respect of sub-section (1A) of section 217. We have, already seen that the aforesaid sub-section provides the sanction to ensure that the assessee carries out the obligation cast upon h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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