“advance tax”
The decision most relied on for advance tax is Bajaj Tempo Ltd. v. CIT (196 ITR 188), cited in 289 judgments on BharatTax.
Leading authorities on advance tax
Provisions in taxing statutes that grant incentives, concessions, or exemptions for promoting economic growth and industrialization must be interpreted liberally and purposively. Any restrictions placed on such provisions should also be construed reasonably to advance their objective, not frustrate it.
Interest under section 234B for default in payment of advance tax is not leviable when the entire income is subject to tax deduction at source under section 195, as no advance tax liability arises for the assessee in such circumstances.
The expression "sufficient cause" for condoning delay in filing appeals must receive a liberal and purposive construction. This approach aims to advance substantial justice, which is of paramount importance.
Section 2(22)(e) of the Income Tax Act, which addresses deemed dividends, does not apply to loans or advances provided by a company to its shareholders if these transactions occur in the normal course of business, are driven by business expediency, or are made in consideration of a benefit conferred upon the company by the shareholder. Conversely, gratuitous loans or advances given to shareholders fall within the purview of this section.
Where a duty is cast on the payer to deduct and pay tax at source under Section 195, the payee-assessee cannot be levied interest under Section 234B for failure to pay advance tax if the payer defaults on its TDS obligation. This principle may also extend to interest under Section 234C.
Export incentives, such as DEPB (Duty Entitlement Pass Book) and advance license benefits, constitute income taxable on an accrual basis under Section 28 of the Income-tax Act. Profit arising on the transfer of DEPB is not eligible for deduction under Section 80HHC.
Genuine trade advances or amounts advanced for bona fide business transactions, driven by commercial expediency, do not fall within the definition of deemed dividend under section 2(22)(e) of the Income-tax Act.
Genuine trade advances made by a company in the ordinary course of business to a shareholder do not fall within the definition of deemed dividend under Section 2(22)(e) of the Income-tax Act.
