C.I.T.-III, BOMBAY. vs. M/S.AESTHETIC BUILDERS PVT.LTD., BOMBAY.

IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION

INCOME INCOME INCOME TAX REFERENCE NO. 3 OF 1991. TAX REFERENCE NO. 3 OF 1991. TAX REFERENCE NO. 3 OF 1991.

The Commissioner of Income-tax,

Bombay City-III, BOmbay.

..Applicant

V/s.

M/s Aesthetic Builders Pvt.Ltd

.. Respondent.

Shri Ashok Kotangale for the applicant.

Ms. Shobha Jagtiani with Prashant Uchol i/b D.M.

Harish for the respondent.

CORAM CORAM CORAM : V.C.DAGA AND A.S.AGUIAR, JJ. : V.C.DAGA AND A.S.AGUIAR, JJ. : V.C.DAGA AND A.S.AGUIAR, JJ.

DATED DATED DATED : : :

7-10-2005. 7-10-2005. 7-10-2005.

JUDGMENT JUDGMENT JUDGMENT : : :

(Per (Per (Per V.C.Daga, J.) V.C.Daga, J.) V.C.Daga, J.)

-------- -------- --------

This is a reference to this Court for

opinion

under section 256(1) of the Income-tax Act,

1961

(‘the Act’ for short), at the instance of

the

Revenue

arising

out of the order of

the

Tribunal

dated 10th August 1988 in relation to the Assessment

Year 1980-81. The question referred is as under:

" Whether, on the facts and in the

circumstances

of the case, the Tribunal was

right

law in holding that interest

u/s

217

was not leviable for failure to

revise

the

statement

income

u/s

209A(4),

ignoring

the

clear

provisions

sec.

209A(1)

the

effect that

statement

advance

tax

is required to be sent if

the

current income is likely to exceed Rs.2500/-

in company cases, as per sec.

208(2)?"

FACTS: FACTS: FACTS:

The essential facts found by the CIT (A) and

ITAT are as under: CNR No : HCBM020004661991 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(2)

Assessment

the

case of

the

respodent-assessee

for

the

A.Y.

1978-79

was

completed

on total income of Rs.16,79,938/-,

after

15th

June

1979;

i.e after the last date on

which

the

assessee was required to file statement of

its

income exigible to advance tax in terms of the

provision of section 209A for A.Y. 1979-80.

The assessee did not pay advance tax during

the

financial year 1979-80.

However, the

assessee

chose

file

Form

No.28-A, showing

loss

Rs.2500/-.

This was on the basis of the assessment

made for A.Y. 1977-78 which had resulted into

negative income.

The assessee filed return later on in the

year

1979-80

showing

positive

income.

The

Income-tax

Officer

while

giving

effect

the

appeallate

order

assessed

the

income

Rs.

13,71,369/- as against the income returned by the

assessee on 30.6.1980 in the sum of Rs.10,29,090/-.

The Income-tax Officer while assessing the

respondent-assessee passed the following order:

" Charge interest under section 215

as statement of advance-tax filed on

6.4.1979 has not been revised upward before

the last date of payment of advance-tax." Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(3)

The assessee made an application before the

Income-tax

Officer contending that levy of interest

under

section 215 is erroneous and prayed that

the

same

should

be vacated.

However, said

submission

did

not

find favour with the

Income-tax

Officer.

Consequently, application made by the

respondent-assessee came to be rejected.

Appeal was filed against the aforesaid order

before

the C.I.T.(A).

In appeal, it was urged that

interest

was not leviable under section 215 as such

the

order of the Income-tax Officer was wrong.

was

further urged that such interest charged by the

Income

Tax Officer;

if at all to be levied

should

have been considered with reference to provisions of

section

217 and at any rate, on merits no

interest

was leviable at all either under sections 215 or

217.

It was reiterated by the assessee that as on

15th

June,

which was the relevant date for

filing

statement

of advance-tax payable, the assessee

was

under no obligation to file an estimate/statement of

advance

tax

since on that date the last

completed

assessment

had

resulted in a loss and

payment

under

section 140A had taken place between the last Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(4)

completed

assessment

and

the relevant

date

i.e.

15.6.1979 when the time for filing the statement and

payment of first instalment of advance tax became

due.

The respondent- assessee had also contended

that

since

it was liable to pay advance tax

under

section

209A,

such the question of

filing

revised

estimate

did

not

arise in

case

the

assessee, thus, no interest either under section 215

or 217 was leviable.

10.

The C.I.T.(A) after

appreciating the

aforesaid submissions was pleased to hold as under:

"Levy of interest under section 217

is not in order and the Income-tax Officer

has not applied his mind to the facts of the

case properly and the levy was bad in law."

The C.I.T.(A) was, thus, pleased to allow the appeal

filed by respondent-assessee vide its order dated

13.12.1984.

11.

The Revenue, not satisfied with the

aforesaid

order filed an appeal before the I.T.A.T.

The

ITAT was pleased to record following concession Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

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given by the parties to the appeal during the course

of hearing:

" Before us, both the parties agreed that we

should consider the case as levy of interest

is under section 217 and not 215."

12.

The parties reiterated their respective

submissions

which

were

advanced

before

the

C.I.T.(A).

The

ITAT, after hearing

parties,

was

pleased

to rely on the CIT(A);s reasoning making it

clear

that

the

order

directing

cancellation

interest

and

reasons

mentioned by the

CIT(A)

support of its order were quite valid.

The Tribunal

while holding the appeal maintainable was pleased to

affirm the order of the CIT(A), the first appellate

authority.

13.

The Revenue sought reference with respect to

two

questions

law;

one

relating

maintainability of the appeal and second relating to

jurisdiction

of the Tribunal holding that

interest

under

section

217 was not leviable for failure

receive the statement of interest under sec.

209A(4).

14.

The question of law extracted in the opening

part

this

judgment

came

referred

as Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(6)

substantial

question

of law;

which

substance

challenges

the

decision of the ITAT on the

ground

that

the Tribunal has ignored the clear

provisions

section 209A(1) to the effect that statement

advance

tax is required to be sent;

if the current

income

likely to exceed Rs.2500/- in

Company’s

case as per section 208(2). (as it stood at the

relevant time)

Submissions: Submissions: Submissions:

15.

The learned Counsel appearing for the

Revenue

submitted

that as held by

the

Income-tax

Officer even if statement of advance tax payable was

computed

in the sum of Rs.2500/- the obligation

file

such

statement

remained

and

the

circumstances,

the assessee having failed to do so,

interest

was

rightly

levied

the

Income-tax

Officer.

It was however, under section 217 and not

215.

was further submitted by the Counsel

for

the

Revenue that for the purposes of

applicability

section

209A of the Act, once it is shown

that

the

total

income of the assessee had exceeded

the

amount

specified in sub-section (2) of section 208,

the obligation to submit a statement was absolute

and levy of interest was a natural consequence.

16.

The Counsel for Revenue further submitted Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(7)

that

the Tribunal had committed an error of law

confirming

the

order of the C.I.T.(A);

who,

had

erroneously

taken into account the last

assessment

this

case

which

was

completed

before

first

instalment

was due for the A.Y.

1977-78 and

which

was

resulted in loss.

According to him, the C.I.T.

(A)

has

wrongly

relied

upon

sub-clause

(1)

section

209 to hold that no payment was required to

made

for

any previous assessment

years

under

appeal

including

with

respect to

the

subsequent

assessment

year 1977-78 before 15.6.1979 in case of

the

respondent-assessee.

Thus,

the

question

assessee

filing

estimate

of advance tax

did

not

arise

in the financial year .

In the submission of

the

learned Counsel for the Revenue, the

C.I.T.(A)

has wrongly held that levy of interest under section

217 was erroneous.

17.

Alternatively, learned Counsel appearing for

the

Revenue submits that the crux of the issue is :

"What

meaning

assigned

the

words

"......where he has not been assessed by way of

regular assessment under this Act."

The Counsel while

recapitulating the

submissions

of the assessee, submits that according

to the assessee, those words would mean the assessee

who

had never been assessed under the provisions of

the

Act.

To put it differently, that person

would

fall in those words, who is absolutely fresh and new Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(8)

assessee

for

the

first

time

coming

within

the

mischief of the Act and not that person who had been

once assessed under the Act.

19.

To counter this submission, learned Counsel

for

the Revenue submits that while interpreting the

words

referred

hereinabove,

cannot

understood

exclude the assessee, who had

filed

his

return

of income for previous assessment

year

but has not been assessed for that assessment year

under the provisions of the Act.

20.

Learned Counsel for the Revenue while

elaborating

logic behind this submission, submitted

that

new

or fresh assessee who

has

not

been

previously

assessed

by way of

regular

assessment

under

the

Act

is under an obligation

furnish

estimate

his current income (if it exceeds

the

amount

specified in sub-section (2) of section 208)

and

advance calculated by him on the current income

the

manner laid down in section 209 and on

the

top

it if he is required to pay advance tax

contemplated

under

section 209A,

then,as

against

this,

how the assessee, who has filed his return of

income

for

the

previous

year but

has

not

been

assessed, can be put to a more adventageous position

than

that

fresh assessee who

has

never

been

assessed

under

the

Act.

He, thus,

submits

that Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(9)

irrespective of the absence of the assessment of his

return

for

the

previous

assessment

year,

the

respondent-assessee

was

under

obligation

comply

with provisions of section 209A of the

Act.

In this view of the submission, he tried to justify

the interest levied under section 217 of the Act.

Per Per Per Contra: Contra: Contra:

21.

Mrs. Shobha Jagtiani, learned Counsel

appearing for the respondent-assessee as against the

aforesaid

submission,

submitted that the order

the Tribunal was justified considering the scheme of

the

provisions regarding computation of payment

tax.

support

of her submissions,

she

placed

reliance on the decision of this Court with two

decisions of the Calcutta High Court.:

Patel Aluminium P.Ltd. vs. Tawadia

(K.M.) (Miss), ITO. 165 ITR 99 (Bom)

CIT vs. Indian Molasses Co.P.Ltd

(1993) 200 ITR 149 (Cal.)

Director of Income-tax (Exemption)

vs Shree Sitaram Public Charitable Trust.

(1994) 207 ITR 1087 (Cal.)

21-A.

Ms. Jagtiani, learned Counsel for the

assessee

further submitted that there is no dispute

that on 15th June, 1979 no statement was required to

be filed by the assessee since there was no positive Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(10)

income

the basis of the computation to be

made

under section 209A since last regular assessment was

showing loss. No advance-tax was thus payable.

21-B.

Ms.

Jagtiani

further

submits that

sub-section

(1A)

section

217

provides

for

charging

interest where the assessee;

who

required

to send an estimate under sub-section

(4)

section

209A

has not sent

such

estimate.

According

her, Section 209A brings

within

its

purview

only

the cases of those assessees who

are

liable

to pay advance-tax under sub-section (1) and

such cases the assessees have to send a

revised

estimate

the current income to be estimated

the assessee exceeds the advance-tax payable by more

than

1/3% If the advance tax payable

‘NIL’

then

statement is required to be furnished,

such

there can be no question of the current income

likely

exceed by 3 1/3% of NIL or loss

figure.

her

submission,

thus,

clear

that

advance-tax

is payable by the assessee in the first

instance

by virtue of sections 209 and 209A.If

the

assesse

is not required to send any statement, then

there

no further obligation to file

revised

estimate since no statement was required to be filed

the first case.

According to Ms.

Jagtiani,

the

Bombay High Court decision in the case of Patel

Aluminium

Pvt.

Ltd reported in 165 ITR 99

Justice Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(11)

Bharucha

while analysing the scheme of section 209A

at page 103 of the judgment and has clearly laid

down as follows:

"The question really boils down to

an interpretation of the words "a statement

of advance-tax payable by him computed in

the manner laid down in" section 209(1)(a).

Under section 209A (1)(a), the obligation of

an assessee who has been previously

regularly assessed to tax is to compute the

advance-tax payable by him inthe manner

provided by section 209(1)(a), to send a

statement of such computation to the

Income-tax Officer and to pay the amount so

computed. The statement that the assessee

is obliged to send statement of the

computation of advance tax payable by him,

such computation to be made as provided by

section 209(1)(a). If upon such computation

being made, no advance-tax is found to be

payable, there is no "advance-tax payable".

There being no "advance tax payable, there

is no obligation to send to the Income-tax

Officer a statement of such computation."

Based

the above observation of this Court,

Ms.

Jagtiani

submits

that

the object of

sending

the

statement

make

known

the

Income-tax

Officer,

the

computation

upon

which

figure

advance

has

been arrived at.Where

advance-tax

payment

made, there is

purpose

sending to the Income-tax Officer the statement of

computation of income.

22.

In the above view of the matter, Ms.

Jagtiani

submits

that

the

petitioners

were

not

obliged

send

to the

Income-tax

Officer,

and Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(12)

therefore,

there

could

liability

pay

interest

under

section 217(1)(a) or penalty

under

section

217(1)(9)

under

section

273.

Ms.

Jagtiani

extending

the

same

submission

further

submits

that if no statement was liable to be

sent

and

advance

tax

was

payable

the

first

instance, then, automatically there is no obligation

revise the estimate upwards stood ceased as that

could

only be done by the assessee, who has in

the

first

instance paid advance-tax or is liable to pay

advance-tax

and liable to send a statement.

In her

submission,

it is very clearly so held in the

case

of CIT vs. Indian Molasses Co. Pvt.Ltd. 200 ITR

149 (Cal.).

. Let us now turn to the case of Indian

Molasses

Co.

Pvt.Ltd (cited supra).

The facts

occurred in that case are set out at page 151 of the

Report

section G.

In that case,

the

relevant

assesment was for the year 1981-82 of which previous

year ended on 30th June, 1980.

The first instalment

of advance-tax was due on 15.6.1980.

The return for

the

proceeding

assessment year 1980-81 was due

30th June, 1980.

Since the date 30th June, 1980 was

after

the date of the first instalment, neither the

returned

income for A.Y.

1980-81 nor the tax

paid

under

section

140A for A.Y.1980-81 could be

taken

into

account

considering

the

liability

of Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(13)

assessee to send a statement.

It was Revenue’s case

that

that

the provisions of section 209A would

attracted

the facts of the case.

However,

the

Calcutta High Court while dealing with the issues

invoklved in the case has held as follows:

"Thus, sub-section (4) will only be

attracted, if an assessee is liable to pay

advance-tax under section (1), but, as we

have already indicated in the instant case,

on the basis of the facts prevailing in the

financial year relevant to the assessment

year of the assessee, the assessee had no

obligation to furnish a statement of

advance-tax under section 209A(a)(a) and as

such sub-section (4) of section 209A cannot

be pressed into service. That apart, the

question referred to us does not cover the

point raised by Mr. Bagchi. We have

already set out the question which only

deals with the obligation of the assessee to

furnish a statement in terms of section

209A(1)(a)."

The above decision has been followed by the Calcutta

High Court in Director of Income-tax (Exemption) vs.

State

Sitaram Public Charitable Trust 207 ITR

1087

and

also referred to the Bombay High Court decision

Patel

Aluminium Pvt.Ltd.

165 ITR 99.

was

thus

held

the

Calcutta

High

Court

this

decision that since the income in the last completed

assessment

under

the

latest income

returned

and

assessed

was

nil,

such a case

there

was

liability

pay

advance-tax on the part

the

assessee

as on 15th June.

Therefore, there was

obligation

file a statement of advance-tax

and Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(14)

thus interest under section 217 was not payable.

has

been held that "section 209A(1) incorporated

twin

requirement

namely

filing of

statement

and

paying of advance-tax in accordance with the

statement.

24.

Ms. Jagtiani reverting back to the facts of

this

case

submitted

that

at the

time

when

the

assessee

obliged

file

statement

under

section 209A(1);

what required to be looked into is

whether

assessee

has

any taxable

income

the

latest

completed assessment.

In such circumstances

there

was

completed

assessment,

there

was

question

levy of interest under section 217

the

Act.

this

view of

the

submission,

Ms.

Jagtiani,

learned

Counsel

for

the

respondent-

assessee

submits

that the question set out in

the

opening

part

of this judgment be answered

the

affirmative i.e. in favour of the assessee and

against the Revenue.

25.

Before dealing with the rival contentions it

will

be relevant to consider the scheme of

Chapter

VII regarding Advance tax payment. Briefly synopsis

of the relevant sections is as under: Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(15)

STATUTORY STATUTORY STATUTORY PROVISIONS : PROVISIONS : PROVISIONS :

Order Order Order by Income-tax Officer: by Income-tax Officer: by Income-tax Officer:

Sec. Sec. Sec.

207(1):

207(1):

207(1):

This section states that tax shall be

payable in advance in accordance with the provisions

sections 208 to 219, in respect of income

which

however

excludes from purview income arising

under

the head Capital Gains and Income from House

Property.

Sec. Sec. Sec.

208(1):

208(1):

208(1):

This section states that advance-tax

shall

payable during the financial

year

where

total

income

( excluding capital gails and

income

from

house property) referred to in sub-clause

(1)

clause

(a)

of section 209 exceeds

the

amount

specified

in sub-clause (2).The amount specified in

sub-section

(2)

applicable to Company

Rs.

2,500/-.

This

section provides

that

advance-tax

shall be payable on the total income of the assessee

referred

to in sub-clause (i) of clause (a)

section 209 which exceeds the limits laid down in

Sub-section (2).

Sec. Sec. Sec.

209(1):

209(1):

209(1):

This section provides for computation

advance-tax payable by an assessee and lays down

the

basis

as being the total income of the

latest

previous

year in respect of which the assessee

has Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(16)

been

assessed

way of

regular

assessment

and

provides

for

certain

deductions

and

exclusions

therefrom.

is thus clear that

section

208(A)

refers

sub-clause (1) of clause (a) of

section

209

which in turn refers to the total incomeof

the

latest

previous

year.

The reference

section

208(i)

only to sub-clause (1) of Clause (a)

section

209.

This section does however provide

sub-clause

(iv)

that

is the

next

amount

income-tax calculated on such income assessed by way

regular

assessment payable but that however

subject

sub-clause (c) and (d) of section

209.

Sub-clause

(c)

provides

for the

case

where

the

estimate

or revised statement has been sent by

the

assessee

either

under section 209A or section

212

then

the income so estimated be substituted for the

total income referred to clause (a).

Sub-clause (d)

provides that if the assessee has paid tax by way of

self-assessment

under section 140A for a year later

than

the

previous year referred to clause (a)

and

such

income

exceeds

total income referred

clause

(a)

then this is to be substituted for

the

income

referred

in (a) or

provided

under

sub-clause (2) if the income tax Officer makes an

amendment order under section 210.

Sec. Sec. Sec.

209A:

209A:

209A:

Section 209A provides that every person

shall

befiore

the

date

when

the

first Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(17)

instalment is due send to the Income-tax Officer, if

is an assessee who has previously been

assessed

way

regular

assessment,

statement

advance-tax

payable by him which is to be

computed

the

manner laid down in clause (a), or

the

case

may

be,

sub-clause

(1)

clause

(d)

sub-section

(1) of section 209.

Since the assessee

has

been

previously

assessed by

way

regular

assessment,

there

dispute

that

such

assessee

is to file a statement before the date

which

the

first instalment of advance-tax is

due,

i.e.

by 15.6.1979, that he has to file a statement

computed as laid down under clause (a) sub-clause

(1) or clause (d) of sub-section (1).

Sub-sectuib (2) of section 209A provides

that an assessee who is required to send a statement

under clause (a) of sub-section (1) estimates before

first

instalment is due that his current income

likely

less

than

the

income

which

advance-tax is payable, then he can send an estimate

in lieu of such statement and pay tax accordingly.

Sub-section (3) further gives the option to

the

assessee to revise the estimate any time before

the

last instalment if the assessee estimates

that

his current income is likely to be less than the

income on which advance-tax is payable. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

(18)

Sub-section (4) provides that in the case of

assessee who is liable to pay advance-tax

under

sub-section (1) or sub-section(2) or sub-section (3)

and

the

assessee estimates

that

the

current

income

likely to be greater than the amount

which

advance-tax so payable has been computed than

before

the

last

instalemnt

advance-tax,

the

assessee

has

to send to the Income-tax Officer

estimate

of the current income and the

advance-tax

payable

him to such advance-tax

accordance

with the estimate and this revised estimate is to be

sent

the difference between the current

income

estimated

the

assessee exceeds the

amount

advance-tax payable by more 33 1/3% of the latter

amount.

210.

Section 210 applies only to assessees who

have

been

previously

assessed by way

regular

assessment.

the

case of

such

assessees

the

Income-tax

Officer

can

make an order

writing

requiring

the

assessee

to pay advance tax

determined

accordance

with the

provisions

section

207,208

and 209 and the notice

demand

accompanying his order has to specify the instalment

in which the advance-tax is payable. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

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Sub-section (3) provides that the Income-tax

prior

15 days from the date of last

instalment

taking

into account the tax paid under section 140A

or any later amendment order requiring the assessee

to pay the advance-tax.

Instalment Instalment Instalment of Advance-tax: of Advance-tax: of Advance-tax:

211.

This section provides that the advance-tax

is payable in three instalments on 15th June, 15th

September and 15th December.

Estimate Estimate Estimate by assessee: by assessee: by assessee:

212(1):

This section refers to an assessee who has

received

order under section 210 and

estimates

that

the tax due in his case would be less than the

amount

that

is required to pay under

such

order,

then

he has the option to send an

estimate

and

pay

tax in accordance with that

estimate

and

sub-section (2) gives him option of a further

estimate in such a case.

Interest Interest Interest payable by assessee: payable by assessee: payable by assessee:

215.

Section 215(1) provides that if an

assessee,

who

has

paid

advance-tax under

section

209A

section

212 on the basis of his own estimate and if Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

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the

advance-tax so paid falls short of the criteria

specified therein, then interest has to be paid by

the assessee.

Interest Interest Interest payable by assessee in case of payable by assessee in case of payable by assessee in case of

under-estimate under-estimate under-estimate:

216.

This applies where the assessee has

under-estimated the advance-tax either under section

212 or section 212, then in such cases interest is

payable as specified in this section.

Interest Interest Interest payableby assessee when no estimate is payableby assessee when no estimate is payableby assessee when no estimate is

made: made: made:

217(1):

This interest is chargeable when the

assessee

being the person referred to in clause (a)

sub-section (1) has not sent statement

referred

to in that clause or the assessee referred to clause

(b)

has

not sent the estimate, then in that

case,

interest

at the rate of 12% per annum is chargeable

in respect of the financial year in which the

advance-tax was payable.

CONSIDERATION: CONSIDERATION: CONSIDERATION:

26.

Having heard rival parties and having

examined

the

statutory

provisions and

the

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cited

the Bar, one thing is clear that

section

217(1)(a)

of the Act requires that where, on making

the regular assessment, the Income Tax Officer finds

that

assessee

referred

clause

(a)

sub-section

(1)

of section 209A has not

sent

the

statement

referred

to in the said

clause,

simple

interest

the prescribed rate for the

specified

period

becomes

payable by the

assessee.

Section

209A(1)

(a)

the Act requires that in

case

every

person

whose

current income

likely

exceed the amount specified in section 208(2) of the

Act,

shall

file

a statement

advance

tax

payable

by him computed in the manner laid down

section

209(1)(a)

the

Act,

section

209(1)(d)(i)

of the Act, provided that such

person

has

previously

been

assessed by

way

regular

assessment.

Upon

filing of such

statement,

such

person is enjoined to pay such amount of advance tax

accords with such statement in equal

instalment

on the due dates specified in section 211 of the

Act.

27.

Turning to section 209 of the Act, it

becomes

clear

that

the

mode

computation

advance tax is laid down by the said provision.

For

the

present,

is necessary only

take

into

consideration section 209(1)(a)(i) read with section

209(1)

(d)(i)

the

Act.

The

said

provision Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

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stipulates

that

a person is liable to pay

advance

tax

which is computed by adopting as the first base

his

total

income

of the latest previous

year

respect

which

he has been assessed by

way

regular

assessment and the second base would be the

total

income of the latest previous year by way

self

assessment

under section 140 of the Act.

otherwords,

the

purpose of computing the

starting

point

of advance tax payable for a particular year,

assessee

required to adopt one of

the

two

bases, namely, the one which is higher :

either the

total

income assessed for the latest previous

year

by way of regular assessment, or the total income as

shown

in the return of income which is

accompanied

by self-assessment tax, and such return of income is

relatable

the latest previous year as

well

being later in point qua the year for which

assessment is completed.

28.

Applying the aforesaid scheme of the Act to

the

facts

the

case,

seen

that

the

assessment

for

the

assessment

year

1977-78

was

completed

after 15th June, 1979 i.e.

after date on

which assessee was required to file statement of his

income

under

the provisions of section 209A.

The

income

the assessee was a positive

income

for

A.Y.

1977-78.

The first instalment was due on 15th

September,

1981.

Therefore,

the

first

terminus Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:31:03

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ascertained

per

the

provisions

section

209(1)(a)(i) of the Act was assessed at loss.

In so

far

as requirement of clause (d) of sub-section (1)

section

209

is concerned, it

admitted

position

that,

for all the subsequent

years,

the

returned

income was either "nil" or at a figure

loss.

Thus,

admittedly, in terms of

section

209

(1)(d) of the Act, the total income for the previous

year

on the basis of self-assesment the advance tax

could

have been ascertained.

In this circumstance,

the

respondent-assessee

was

obliged

file

statement

of advance tax as required under

section

209.

Requirement

submitting

statement

estimate

under the provisions of the Act is for the

purpose

paying advance tax and

furnishing

the

basis

the

assessing

authority

which

the

advance

tax is paid.

Since there was a failure

the part of the assessee to file estimate of advance

tax

levy

interest

under

section

217

was

justified.

Having recorded finding in favour of the

Revenue

on this count, we feel, it is not necessary

for us to consider alternate submission advanced by

the learned Counsel for the Revenue.

29.

Any requirement to pay interest is to be

tested

the light of the

commercial

principles

also.

If a person liable to pay advance tax

fails

pay, then its deprivation has to be

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terms

money.

Even on application

this

commercial

principle,

the assessee has

failed

make out any case for denying right of the revenue

to claim interest.

30.

In this view of the matter, the question is

answered in the affirmative i.e. in favour of the

Revenue and against the assessee.

(V.C. (V.C. (V.C. DAGA, J.) DAGA, J.) DAGA, J.)

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