BELANI G B Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to this court under section 256(2) of the Income-tax Act, 1961 ("the Act" for short), reads :

(2.) THE question pertains to the assessment year 1973-74. THE assessee had been issued with a notice of demand to pay advance tax under section 210 of the Act; the basis for the demand was the tax assessed on the assessee for the assessment year 1969-70. But, at the time of finalising the assessment for the relevant year (assessment year 1973-74), it was found that the tax payable by the assessee exceeded the advance tax demanded by more than 33 1/3 percent Which meant that the assessee was under an obligation to file an estimate of his income and the advance tax payable and pay the same as provided under section 212(3A) of the Act. THE Income-tax Officer issued a notice asking the assessee's explanation for this failure on the part of the assessee. According to the assessee, his main source of income was from two firms of which he was a partner and he had no knowledge till March 14, 1973, that his share income from the firms would be more. This explanation that the assessee was unaware of his share income at the relevant point of time fir filing the estimate of the income for advance tax purpose was not accepted by the Assessing Officer and this finding has been confirmed throughout.

(3.) THERE is no dispute that the order under section 210(1) demanding the advance tax is based on the computation of the income under section 209 and that the amount of advance tax payable by an assessee shall be computed having regard to (among other things) his total income of the latest previous year in respect of which he has been assessed by way of regular assessment; this figure would be substituted by a more recent figure of income, if available. In the case of a partner of a firm, his share in the firm's income, as assessed, is the basis to compute his income for purposes of advance tax (in addition to his income from any other source). THEREfore, the Explanation to section 209(1) states that if the assessee is a partner of a registered firm and an assessment of the firm has been completed for a previous year later than the latest previous year for which the assessee's assessment has been completed, his share in the income of the firm shall be included in his total income for the purpose of advance tax payable by him, on the basis of the said assessment of the firm.