COMMISSIONER OF INCOME TAX Vs. INDIAN ALUMINIUM INDUSTRIES

JUDGEMENT

(1.) THIS is a reference made by the Income-tax Appellate Tribunal under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue. The following two questions have been referred to the High Court :

(2.) THE matter relates to the assessment year 1976-77, THE respondent therein had been assessed for the previous years. In the year concerned, a notice dated November 27, 1975, under Section 210 of the Act was issued to the respondent on the basis of assessed income of Rs. 40,250 for the assessment year 1972-73 requiring him to deposit a sum of Rs. 2,000 by way of advance tax on or before December 15, 1975. THE assessee did not pay the amount and did not submit any estimate as required under Section 212(3A) of the Act. THEreafter, the Assessing Officer levied interest under Section 217(1 A) of the Act. THE appeal preferred by the assessee was dismissed by the Commissioner. In further appeal, the Tribunal acting on a circular issued by the Central Board of Direct Taxes, held that the provisions of Section 217(1A) of the Act are not attracted in the instant case. Incidentally, the Tribunal also took note of the fact that proceedings for penalty under Section 273(c) had been dropped. THE assessee was held not liable to pay interest under Section 217(1A).

(3.) ADMITTEDLY, the assessee in this case did not forward the estimate to the Income-tax Officer and did not make payment of advance tax as contemplated. Section 217 provides for interest payable by the assessee when no estimate is made. Section 217(1A) states, inter alia, that where, on making the regular assessment, the Income-tax Officer finds that any such person as is referred to in Sub-section (5A) of Section 212 has not sent the estimate referred to therein, simple interest at the rate of twelve per cent. shall be payable by the assessee upon the amount by which the advance tax paid by him falls short of the assessed tax as defined in Sub-section (5) of Section 215 of the Act. In the present case, the respondent did not make an estimate. Therefore, Section 217(1A) would ordinarily be attracted.