Delhi H.C : Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the sum of Rs. 1,26,000 should be taken into account while calculating the question of interest under s. 217(1A) as advance tax payment ?

High Court Of Delhi

CIT vs. Webbing & Belting Factory (P)Ltd.

Section 217(1A)

Asst. Year 1972-73

Arijit Pasayat, C.J. & D.K. Jain, J.

IT Ref. No. 261 of 1981

10th January, 2001

Counsel Appeared

Sanjeev Khanna with Ajay Jha, for the Revenue : None, for the Assessee

JUDGMENT

ARIJIT PASAYAT, J. :

At the instance of the Revenue, the following question has been referred for the opinion of this Court by the Income-tax Appellate Tribunal, Delhi Bench-E (the “Tribunal” in short), under s. 256 (1) of the IT Act, 1961 (in short “the Act”) : “Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the sum of Rs. 1,26,000 should be taken into account while calculating the question of interest under s. 217(1A) as advance tax payment ?”

2. The factual position is almost undisputed and is as follows : For the asst. yr. 1972-73, the assessee was required to pay advance tax in terms of s. 210 of the Act, the total amount payable being Rs. 50,594. The dates for payment of advance tax are indicated in the statute. The assessee paid the first two instalments totalling to Rs. 39,062 upto 14th Dec., 1971. Regular assessment for the year was completed on a total income of Rs. 3,85,530 on which tax payable was Rs. 2,36,272. Considering the total income determined and the tax payable thereon, the assessee was required to file an estimate as required under s. 212(3A) of the Act and also to pay tax thereon before the date on which the last instalment of advance tax was due, i.e., 15th March, 1972. However, the assessee field the estimate of current income on 25th March, 1972, and paid the sum of s. 1,24,000 on 13th March, 1972, over and above Rs. 39,062, which had already been paid. The ITO levied interest in terms of s. 217(1A) of the Act. While doing so he did not take into account payment of Rs. 1,24,000 made on 13th March, 1972. The assessee challenged the levy before the Commissioner of Income-tax (Appeals) [in short the “CIT(A)”]. The said authority upheld the levy. The matter was carried in further appeal before the Tribunal by the assessee. The Tribunal was of the view that the amount having been paid before the close of the assessment year and the estimate having been filed before the said date, while charging interest, the payment of Rs. 1,24,000 had to be taken note of. On being moved for reference, the question as set out above, has been referred for the opinion of this Court.

3. We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessee in spite of service of notice.

4. According to learned counsel for the Revenue, the estimate having been filed after the due date, the mere fact that the payment was made before the due date would not wipe out the liability of interest.

5. We had occasion to deal with a similar question In IT Ref. No. 211 of 1980 titled CIT vs. Eskay Electronics (India) Ltd. (2001) 165 CTR (Del) 741 : (2001) 248 ITR 536 (Del). Reference was made to a decision of the Andhra Pradesh High Court in Bakelite Hylam Ltd. vs. CIT (1993) 113 CTR (AP) 33 : (1993) 202 ITR 145 (FB) : TC4Ps.13. The apex Court had also occasion to consider a similar question in CIT vs. Kohinoor Flour Mills (P) Ltd. (1991) 94 CTR (SC) 162 : (1991) 187 ITR 585 (SC) : TC 4R.1088. Following the view expressed in the aforesaid cases, the answer to the question referred is in the affirmative, in favour of the assessee and against the Revenue.

[Citation : 248 ITR 539]

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