Income Tax Appellate Tribunal - Kolkata
Deputy Commissioner Of Income-Tax vs Prabhat Chandra Sen on 17 June, 1992
Equivalent citations: [1992]42ITD627(KOL)
ORDER
Vimal Gandhi, Judicial Member
1. This appeal by the Revenue for the assessment year 1987-88 is directed against the order of the Commissioner of Income-tax (Appeals) deleting interest levied under Section 216 of the Income-tax Act, 1961.
2. Undisputed facts are that the assessee filed a statement of advance-tax in Form No. 28A under Section 209A(1)(a) of the Act and paid accordingly the first instalment of advance-tax amounting to Rs. 79,187 on 11 -9-1986. The assessee purporting to revise this estimate filed a fresh estimate of advance-tax and paid further sum of Rs. 1,52,856 on December 9, 1986 as second instalment of advance-tax. The above estimate was again revised and third instalment of advance-tax of Rs. 2,15,357 was paid on March 19, 1987. On regular assessment, the total amount of tax payable was found to be Rs. 4,38,180. According to the revenue, the assessee should have paid Rs. 1,46,060 as each instalment of advance tax. For failure to pay the above amount, the assessee was asked to pay interest under Section 216 of the Act.
3. The assessee challenged the levy in appeal before the CIT (Appeals) and urged that he was not liable to pay interest under the above section. The CIT (Appeals) allowed full relief to the assessee. The Revenue has brought the issue before the Appellate Tribunal.
4. We have heard the parties. Shri S.C. Sen, the learned departmental representative, contended that the CIT (Appeals) has deleted the interest charged by following strange reasoning. The default of the assessee was to be judged with reference to advance-tax paid by the assessee in three instalments and facts on record clearly established that the assessee under-estimated the advance-tax payable and reduced the amount of tax payable in either of the first two instalments. The assessee, therefore, was liable to pay interest under Section 216 of the Act. The aforesaid submissions were opposed on behalf of the assessee.
5. Having considered the rival submissions of the parties, we find no merit in this appeal of the Revenue. An assessee can be held to be liable to pay interest if either of the two clauses of Section 216 are attracted. The said clauses are reproduced hereunder :
216. Where, on making the regular assessment, the Assessing Officer finds that any assessee has--
(a) under Section 209A or Section 212 under-estimated the advance tax payable by him and thereby reduced the amount payable in either of the first two instalments; or
(b) under Section 213 wrongly deferred the payment of advance tax on a part of his income, he may direct that the assessee shall pay simple interest at fifteen per cent per annum. ...
Sub-clause (b) has not been invoked and is admittedly not applicable. The other Sub-clause (a) has been applied. For applying the aforesaid sub-clause it has to be shown that the assessee "under estimated" the advance-tax payable and thereby reduced the amount payable in either of the first two instalments. Mere reduced or short payment of first two instalments would not attract application of the provision. The short payment should follow and be consequences of "under estimate". The words "under estimation" mean - an estimate below the truth or which is too low. It has to be under or lower than required by the statute. An estimate which is made in accordance with requirements of law cannot be treated as "under estimate". It is, therefore, to be seen whether the assessee under-estimated the advance-tax payable by him. There is no dispute that the assessee filed statement under Section 209A(1)(a) and paid first instalment of advance-tax as per above statement. The estimate in the aforesaid statement cannot be said to be "under estimate" and, therefore, there is no question of application of Section 216 of the Act to the first instalment. The question, therefore, arises as to whether there was under estimate of advance-tax payable and reduction of amount of tax payable in the second instalment. Here again, statutory obligation of the assessee, at the time of payment of second instalment of advance-tax is to be seen and if the same is kept in mind, there is no failure on the part of the assessee. The statement of advance-tax filed under Section 209A(1)(a) can only be revised under Sub-section (4) of Section 209A which, without provisos, is to the following effect:
(4) In the case of any assessee who is liable to pay advance-tax under Sub-section (1) or Sub-section (2) or, as the case may be, Sub-section (3), if, by reason of the current income being likely to be greater than the income on which the advance-tax so payable by him has been computed or for any other reason, the amount of advance-tax computed in the manner laid down in Section 209 on the current income (which shall be estimated by the assessee) exceeds the amount of advance-tax so payable by him by more than 33-1/3 per cent of the latter amount, he shall on or before the date on which the last instalment of advance tax is payable by him, send to the Income-tax Officer an estimate of--
(i) the current income, and
(ii) the advance tax payable by him on the current income calculated in the manner laid down in Section 209, and shall pay such amount of advance tax as accords with his estimate on such of the dates applicable in his case under Section 211 as have not expired, by instalments which may be revised accordingly to Sub-section (5):
It is clear from the above sub-section that statement of advance tax as per scheme of the Act has to be revised only before the date on which last instalment of advance tax is payable by the assessee. The said statement is not to be revised at the time of payment of second instalment of advance tax. In other words, an assessee, who has been previously assessed by way of regular assessment, has to pay first two instalments of advance tax on the basis of "current income" computed under Section 209 of the Act. If the two instalments are paid as per the aforesaid terms, Section 216 will have no application and it cannot be said to be a case of "under estimate" of advance tax. Clause (a) of Section 216 will have no application in such a case. In the present case, the assessee clearly met the requirement of the statute and there was no default to payment of any of the first two instalments. Thus, for the reasons given above, we are unable to hold that the assessee was a defaulter liable to pay interest under Section 216.
6. Shri S.C. Sen, vehemently contended that the assessee himself filed an estimate of advance tax at the time of payment of second instalment which was an under estimate and, therefore, cannot now plead "no default". The assessee further cannot claim that there was no obligation to revise the estimate of advance tax at the time of payment of second instalment. We do not find any merit in these submissions. As pointed out above, interest is to be charged for under estimate of advance tax and for not following statutory provisions relating to payment of advance tax. If requirements of provisions are satisfied, as is the present case, there is no question of charging any interest under Section 216 of the Act. We, therefore, uphold the order of the CIT (Appeals), though on different reasons.
7. In the result, the departmental appeal fails and is hereby dismissed.