Kerala H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in law and in fact in holding that interest was not leviable under s. 217(1) of the IT Act, 1961?

High Court Of Kerala

CIT vs. English Indian Clays Ltd.

Sections 209A, 217

Asst. Year 1982-83

Om Prakash, C.J. & J.B. Koshy, J.

IT Ref. No. 132 of 1996

26th August, 1998

Counsel Appeared

P.K.R. Menon & N.R.K. Nair, for the Applicant : P. Balachandran, for the Respondent

JUDGMENT

OM PRAKASH, C.J. :

The Tribunal at the instance of the Revenue referred the following questions relating to the asst. yr. 1982-83 for the opinion of this Court :

“(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law and in fact in holding that interest was not leviable under s. 217(1) of the IT Act, 1961?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law and in fact in holding that the assessee was (sic-not) liable to file an estimate for advance tax?”

2. The finding of the Tribunal in regard to the above questions is brief and is reproduced below: “…Coming to the facts of this case also, the assessee was not liable to pay any advance tax nor was any notice served on theassessee for that purpose. Therefore, the assessee was not liable to file an estimate of the advance tax. So, the view of the CIT(A) that an appeal against the levy of interest under s. 217 is not maintainable was not correct and we interfere with his finding and set aside the same”.

3. The submission of the learned senior standing counsel before us is that the Tribunal has not considered theambit and scope of s. 209A inserted by the Finance Act, 1978, w.e.f. 4th June, 1978, which is germane for theassessment years in question. The submission of the senior standing counsel is that before reaching the conclusion that the assessee was not liable to pay any advance tax or to file an estimate of the advance tax, the Tribunal has not given any reasoning and whatever reasoning is given that is wholly relevant (sic). We see force in this submission of the senior standing counsel. The ambit and the scope of s. 209A inserted by the Finance Act, 1978, has been elaborated in the Department Circular No. 240, dt. 17th May, 1978. Neither has the circular nor has any other material been looked into by the Tribunal to come to the conclusion that the assessee was not liable to pay advance tax, nor was the assessee under legal obligation to file an estimate of the advance tax.

4. We are, therefore, of the considered view that the matter deserves to be remitted to the Tribunal for reconsideration and we do so now.

5. In view of the above observations, no final view is expressed on the questions referred to this Court. The questions are returned unanswered with the observations that the Tribunal will reconsider the relevant issues taking into consideration the relevant materials and the statutory provisions and then record a finding giving reasons as to whether the assessee was liable to pay advance tax and was under legal obligation to file an estimate of the advance tax. The reference is disposed of accordingly.

[Citation : 239 ITR 546]

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