HARAYANA MILK FOODS LTD. Vs. INSPECTING ASSISTANT COMMISSIONER.

JUDGEMENT

(1.) The assessed a limited company has preferred this appeal against the levy of interest u/s 216 of the IT Act, 1961.

(2.) The brief facts of the case are that the assessed had filed the statement of its income for advance tax purposes in Form No. 28A on 13th September, 1983. The income shown in this statement was Rs. 8,12,240 which income represented the last assessed income. The first two Installments of advance tax were paid based on this income. On 15th March, 1984, the assessed company had filed From No. 29 estimating its income at Rs. 18,12,240 and had paid the last Installment of advance tax accordingly. The ITO on completion of the assessment levied the interest u/s 216 of Rs. 16,072 for the reason that the first two Installments of advance tax were lesser than the last Installment, though he did not call upon the assessed company to explain it. Aggrieved the assessed company preferred appeal to the CIT (A). The contention of the assessed was that as required by law it had filed the statement of its income in Form No. 28A and had paid the taxes accordingly and Therefore no interest could be charged from the assessed. In support of its contention the assessed had placed reliance on Tribunals decision in Narottam Dass Ram Chand and Co. v/s. ITO, [1984] Tax. 73(6A) -31 (Bom). The CIT (A) rejected the contention of the assessed and he recalculated the amount of interest to be charged at Rs. 14,066 as against Rs. 16,072 charged by the ITO. The assessed being aggrieved by this order of the CIT (A) dated 26th June, 1986 has come up in appeal before us.

(3.) The learned counsel Mr. Pradeep Dinodia appearing for the assessed contended that the assessed company had filed the Form No. 28A based on the last assessed income and this was so done in compliance with the provisions contained in secs. 209 and 209A. He submitted that till 31st May, 1978 the law required the ITO to issue notice of advance tax u/s 210 on the basis of which the assessed was required to pay the advance tax Installments. He added that the assessed could submit an estimate of lower income on receipt of the notice from the ITO and the assessed was required to file an estimate of higher income only when the current income exceeded the income on which advance tax was paid by a specified percentage and not otherwise. He then added that the law under -went changes effective from 1st June, 1978 and the assessed who were assessed were obligated to file the statement of income in Form 28A based on either the last assessed income or the last returned income in which there was payment of self -assessment tax whichever income was larger and pay the first two Installments on that income. The Act also provided for filing of a lower estimate of income initially. The Act provided for the estimation of higher income only when the current years income was more than the income as per Form 28A by 33 and 1/3rd per cent and this estimation was to be done on or before the last Installment of advance tax was due. He accordingly pleaded that the assessed in the instant case having complied with the law literally, interest could not be charged for the mere reason that the first two Installments of advance tax were lower than the last Installment of advance tax. He pleaded that the statement of income and estimate of income are two different and distinct categories recognised by the Act. He pleaded that sec. 216 would get attracted only when the assessed files and estimate by which he had reduced the first two Installments and not in a case like that of the assessed, where only a statement of income was filed. He finally contended that the interest could not be levied on the assessed at all and the same should be cancelled and relied on the Tribunals decision (supra)