Commissioner of Income Tax vs Webbing and Belting Factory (P.) Ltd.

Arijit Pasayat, C.J.—At the instance of the Revenue, the following question has been referred for the opinion of this court by the Income Tax Appellate Tribunal, Delhi Bench-E (the "Tribunal" in short), u/s 256(1) of the Income Tax Act, 1961 (in short "the Act"):

"Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the sum of Rs. 1,26,000 should be taken into account while calculating the question of interest u/s 217(1A) as advance tax payment ?"

The factual position is almost undisputed and is as follows :

For the assessment year 1972-73, the assessed was required to pay advance tax in terms of Section 210 of the Act, the total amount payable being Rs. 50,594. The dates for payment of advance tax are indicated in the statute. The assessed paid the first two Installments totalling to Rs. 39,062 up to December 14, 1971. Regular assessment for the year was completed on a total income of Rs. 3,85,530 on which tax payable was Rs. 2,36,272. Considering the total income determined and the tax payable thereon, the assessed was required to file an estimate as required u/s 212(3A) of the Act and also to pay tax thereon before the date on which the last Installment of advance tax was due, i.e., March 15, 1972. However, the assessed filed the estimate of current income on March 25, 1972, and paid the sum of Rs. 1,24,000 on March 13, 1972, over and above Rs. 39,062, which had already been paid. The Income Tax Officer levied interest in terms of Section 217(1A) of the Act. While doing so he did not take into account payment of Rs. 1,24.000 made on March 13, 1972. The assessed challenged the levy before the Commissioner of Income Tax (Appeals) (in short the "CIT(A)"). The said authority upheld the levy. The matter was carried in further appeal before the Tribunal by the assessed. The Tribunal was of the view that the amount having been paid before the close of the assessment year and the estimate having been filed before the said date, while charging interest, the payment of Rs. 1,24,000 had to be taken note of. On being moved for reference, the question as set out above, has been referred for the opinion of this court.

We have heard learned counsel for the Revenue. There is no appearance on behalf of the assessed in spite of service of notice.

According to learned counsel for the Revenue, the estimate having been filed after the due date, the mere fact that the payment was made before the due date would not wipe out the liability of interest.

We had occasion to deal with a similar question in ITR No. 211 of 1980 titled COMMISSIONER OF INCOME TAX Vs. ESKAY ELECTRONICS (INDIA) LTD., Reference was made to a decision of the Andhra Pradesh High Court in Bakelite Hylam Ltd. Vs. Commissioner of Income Tax, The apex court had also occasion to consider a similar question in Commissioner of Income Tax Vs. Kohinoor Flour Mills P. Ltd., Following the view expressed in the aforesaid cases, the answer to the question referred is in the affirmative, in favor of the assessed and against the Revenue.