ADDITIONAL COMMISSIONER OF INCOME TAX Vs. CHITRA SAGAR

JUDGEMENT

(1.) THE assessee is a firm which carried on business as film producer. In respect of the assessment year 1965-66, the assessee filed an estimate under Section 212(3) of the Income-tax Act, 1961 (hereinafter called "the Act"); on March 15, 1965, estimating a tax payable at Rs. 4,200 which sum was also paid on the said date. THE return was later filed admitting an income of Rs. 18,383 on January 22, 1970, resulting in a tax demand of Rs. 532. In view of the payment of advance tax of Rs. 4,200 the assessee was given credit for interest of Rs. 1,313 under Section 214 of the Act.

(2.) THE Addl. CIT, Madras, purported to revise the order of the ITO under Section 263. He took the view that as the amount of advance tax was not paid in pursuance of a valid estimate since the said estimate and payment had to be made on or before March 1, 1965, under the law applicable to the relevant assessment year, the order of the ITO granting interest under Section 214 and omitting to charge interest under Section 217 was erroneous in so far as it is prejudicial to the interest of the revenue and, therefore, issued a show-cause notice to the assessee. By his order dated June 24, 1971, the Addl.

(3.) IN view of the special and peculiar feature present in this case, we do not consider it necessary to decide this general question. As we have pointed out already, the Commissioner when he passed the order setting aside the order of the ITO granting interest and directing him to recover the amount he also stated that no proceedings were necessary for collecting interest under Section 217 of the Act. Section 217 reads as follows: