COMMISSIONER OF INCOME TAX Vs. BIHAR JOURNALS LIMITED

JUDGEMENT

(1.) THIS is a reference under Section 256(2) of the Income tax Act, 1961 (hereinafter to be referred to as " the Act " only). The statement of case was called for from the Tribunal on the following questions of law :

(2.) THE assessment year involved is 1974-75. THE assessee is a limited company. It paid a sum of Rs, 21,943 as advance tax in accordance with the provisions of Section 210 of the Act pursuant to an order of the Income-tax Officer. On September 15, 1973, the assessee filed an estimate of its income as provided under Section 212 (3A) of the Act estimating its income at Rs. 2,30,000 for the assessment year in question since, according to the assessee, the current income was likely to be greater than the income on which the advance tax was payable by him under Section 210 of the Act. But it did not pay the tax in accordance with the said estimate. THE total income of the assessee was assessed at Rs. 4,54,360 under Section 143(3) of the Act and the tax payable came to Rs. 2,62,393. Accordingly, the Income tax Officer, in the said order itself, apart from directing issuance of demand notice for tax, also directed that interest for late filing of return and penal interest under Section 217(1A) to be charged as per law, (emphasis added).

(3.) A reading of Section 212(3A) clearly shows that, if an assessee who is required to pay advance tax pursuant to an order under Section 210 finds that his income for the relevant assessment year is likely to be greater than the income on which the advance tax is payable by him as per the orders of the Income-tax Officer, then (i) he has to send an estimate of the current income and the advance tax payable by him thereon and also (ii) he has to pay the said amount of advance tax on the date specified under the Act. Under Section 217(1A) of the Act, the Legislature has provided for levy of interest only in a situation where the assessee fails to send an estimate in respect of his current income and the amount of advance tax payable thereon in accordance with Section 212(3A). The language employed does not admit of any ambiguity. It clearly provides that the interest shall be payable if "such person as is referred to in Sub-section (3A) of Section 212 has not sent the estimate referred to therein." Under Section 217(1A), it has not been provided that interest will also be payable even if the estimate is filed but the advance tax payable thereon is not paid. On the other hand, in a case where the estimate is filed but advance tax payable thereon is not paid then, Section 215 of the Act will come into play and interest will be payable under this section in respect of the shortfall in the advance tax payable.