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income-tax Officer Vs. Warren Tea Ltd. - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Kolkata
Decided On
Judge
Reported in(1984)7ITD697(Kol.)
Appellantincome-tax Officer
RespondentWarren Tea Ltd.
Excerpt:
.....tax filed by the assessee, advance tax payable by it amounted to rs. 48,51,000. this amount was paid as advance tax on 15-3-1979. on the same day, it was, however, felt that a further sum would be payable by the assessee by way of advance tax. so on the same date, i.e., 15-3-1979, a further sum of rs. 6,93,000 was paid as advance tax through the challan prescribed for payment of advance tax. no revised estimate of advance tax was, however, filed by the assessee on or after 15-3-1979.3. the assessment for the assessment year 1979-80 was completed by the ito on 27-2-1982 on a total income of rs. 84,97,930. the assessment order merely directed that credit be given for the advance tax paid. in the demand notice, however, the sum of rs. 48,51,000 alone was treated as advance tax paid and.....
Judgment:
1.The revenue is in appeal before us. The assessment year involved is 1979-80.

2. The assessee is a limited company. It filed an estimate of advance tax in Form No. 29 under Section 209A of the Income-tax Act, 1961 ('the Act') on 15-3-1979, though the estimate and the covering letter were dated 14-3-1979. According to the estimate of advance tax filed by the assessee, advance tax payable by it amounted to Rs. 48,51,000. This amount was paid as advance tax on 15-3-1979. On the same day, it was, however, felt that a further sum would be payable by the assessee by way of advance tax. So on the same date, i.e., 15-3-1979, a further sum of Rs. 6,93,000 was paid as advance tax through the challan prescribed for payment of advance tax. No revised estimate of advance tax was, however, filed by the assessee on or after 15-3-1979.

3. The assessment for the assessment year 1979-80 was completed by the ITO on 27-2-1982 on a total income of Rs. 84,97,930. The assessment order merely directed that credit be given for the advance tax paid. In the demand notice, however, the sum of Rs. 48,51,000 alone was treated as advance tax paid and it is on this amount that interest under Section 214 of the Act has been calculated. The demand notice further mentioned that the credit of Rs. 6,93,000 is given as 'other payment'.

As the payment of Rs. 6,93,000 was not considered as advance tax for the purpose of allowing interest under Section 214, the assessee felt aggrieved and appealed to the Commissioner (Appeals).

4. It was contended before the Commissioner (Appeals) on behalf of the assessee that since the payment of Rs. 6,93,000 was also made on 15-3-1979, this amount should be treated as advance tax payment and interest under Section 214 should be allowed, accordingly. This argument found favour with the Commissioner (Appeals), who following the decisions of the Gujarat and Kerala High Courts in the cases of Chandrakant Damodardas v. ITO [1980] 123 ITR 748 and Santha S. Shenoy v. Union of India [1982] 135 ITR 39, respectively, directed the ITO to treat the amount of Rs. 6,93,000 paid on 15-3-1979 as advance tax payment and to consider this amount for allowing interest under Section 214. Feeling dissatis.fied with the decision of the Commissioner (Appeals), the revenue has now come up in appeal before the Tribunal.

5. The learned departmental representative while pressing the appeal has contended that the payment of Rs. 6,93,000 made by the assessee on 15-3-1979 cannot be considered as payment of advance tax for the purpose of allowing interest under Section 214 for the reason that this payment was not made in accordance with the estimate of advance tax filed by the assessee under Section 209A. In this connection, it was further submitted that if the assessee after payment of the sum of Rs. 48,51,000 as advance tax felt that some more sum was required to be paid by way of advance tax, it was imperative for it to have filed a revised estimate of advance tax under Section 209A(5) and thereafter it should have paid the balance of advance tax. It was, thus, contended that the amount of Rs. 6,93,000 does not qualify for payment of interest under Section 214. The learned departmental representative has cited before us a decision of the Tribunal Calcutta, Bench B', dated 22-1-1982, in IT Appeal No. 2076 (Cal.) of 1980 for the assessment year 1974-75, in the case of Kalidas Mullick, at page 50 of the Trigist, Vol. 9 (period ending May, 1982). A copy of the Board's Instruction No.889-CBDT F. No. 400/59 of 1975-ITCC, dated 10-10-1975 has also been placed before us.

6. The learned authorised representative for the assessee, on the other hand, defended the impugned order passed by the Commissioner (Appeals) by submitting that as the subsequent payment of Rs. 6,93,000 was also made within time on 15-3-1979, it has to be considered to be the payment of advance tax under Section 209A with the result that it qualified for payment of interest under Section 214. It was also submitted that from the challan through which this payment was made, it was clear that the payment was made by way of advance tax and that the claim of the assessee for interest under Section 214 in respect of this amount is, thus, fully justified.

7. We have given our careful consideration to the rival submissions made before us and have gone through the case laws cited before us as well as the copy of the Board's instructions filed by the department.

The crucial question which requires determination is whether the payment of Rs. 6,93,000 made by the assessee on 15-3-1979 may be considered to be the payment of advance tax under Section 209A for the purpose of allowing interest under Section 214. Under Section 214, 'the Central Government is obliged to pay simple interest at 12 per cent per annum on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under Sections 207 to 213 of the Act exceeds the amount of tax determined on regular assessment, from the 1st day of April next following the said financial year to the date of regular assessment...'. It will, thus, be seen that it is only the payment of advance tax under Sections 207 to 213 which qualifies for the payment of interest to the assessee under Section 214. It is an indisputable fact that the assessee, in lieu of a statement of advance tax payable by it, filed an estimate of the current income and the advance tax payable by it under Sub-section (2) of Section 209A. The estimate was filed on 15-3-1979 and on the same date in accordance with the estimate, the sum of Rs. 48,51,000 was paid as advance tax. The assessee did not file any revised estimate but on the same date paid a further sum of Rs. 6,93,000 as advance tax. Section 207 lays down that tax shall be payable in advance in accordance with the provisions of Sections 208 to 219 of the Act in the case of income other than (a) income chargeable under the head 'Capital gains' ; and (b) income referred to in Sub-clause (ix) of Clause (24) of Section 2 of the Act.

Such income is referred to in Chapter XVII as 'income subject to advance tax' and such tax as 'advance tax'. So, in view of the definition of the term 'advance tax' as given under Section 207, tax payable in advance in accordance with the provisions of Sections 208 to 219 is to be regarded as advance tax. In the case of the assessee, we are concerned with Section 209A as the amount of Rs. 6,93,000 was stated to have been paid under this section as advance tax. It has already been stated that the assessee filed an estimate of advance : tax in lieu of statement of advance tax. Therefore, under Sub-section (2) of Section 209A, the assessee was required to pay such amount of advance tax as accords with his estimate in equal instalments on the dates applicable in its case under Section 211. In the case of an assessee who files a statement of advance tax under Sub-section (1) of Section 209A, such an assessee is required to pay advance tax in accordance with such statement. Sub-section (5) of Section 209A enables an assessee to file a revised estimate of advance tax payable by him on or before any one of the dates specified in Section 211. Here, it would also be worthwhile to refer to the provisions of Section 218 which, inter alia, says that if an assessee does not pay any instalment of advance tax in accordance with a statement or an estimate of advance tax or a revised estimate, he shall be deemed to be an assessee in default in respect of such instalment or instalments. The law, thus, insists on payment of advance tax in accordance with the statement or estimate of advance tax filed by an assessee. So, the payment made as advance tax has to be in accordance with the statement or estimate of advance tax filed under Section 209A. If a payment does not accord with or conform to an estimate of advance tax, it cannot be said to be a payment of advance tax. If an act is to be done in the manner prescribed by law, then the act not done by following the prescribed procedure must be regarded as non-existent in the eye of law. If a payment which is not in accord with the estimate of advance tax is recognised as payment of advance tax under Section 209A, it will have the effect of rendering the provisions of Section 209A which lay down that the payment must be in accord with the estimate, nugatory. Even assuming that the requirement of the payment being in conformity with the estimate of advance tax is of a technical nature, the mandate of law cannot be disregarded and ignored on the ground of its being of a technical nature. It is one of the cardinal principles of interpretation of a statute that every word used in an enactment has to be given effect to and should not be regarded as redundant or nugatory.

Undeniably, the payment of Rs. 6,93,000 made by the assessee is not in accordance with the estimate iled by it. It failed to file a revised estimate under Sub-section (5) of Section 209A. So, the payment of Rs. 6,93,000 cannot be treated as a payment of advance tax under Section, 209A with the result that it does not qualify for payment of interest under Section 214. This payment cannot partake the character, of advance tax simply because it was made through the challan prescribed for payment of advance tax.

8. The problem may be tackled from a slightly different angle. Filing of a statement or estimate of advance tax is a condition precedent for payment of advance tax under Section 209A. Advance tax in this case became payable only on the basis of the estimate filed by the assessee in Form No. 29 on 15-3-1979. According to this estimate, advance tax payable was Rs. 48,51,000 which was duly paid by the assessee on the same date. As no revised estimate was filed, it cannot be said that a further sum of Rs. 6,93,000 became payable as advance tax and that this payment amounted to payment of advance tax under Section 209A. In the case of the assessee, the tax payable in advance was the one which was in accordance with the estimate filed by it under Section 209A. So keeping in view the definition of advance tax as given under Section 207, it must be held that the payment of Rs. 6,93,000 cannot be considered to be payment of advance tax. As this amount did not become payable in accordance with the estimate filed by the assessee and in accordance with the provisions of Section 209A, it cannot be treated as advance tax. So, for this reason also, we are of the opinion that the claim of the assessee that the amount of Rs. 6,93,000 qualifies for payment of interest under Section 214 should have been disallowed.

9. The authorities cited by the Commissioner (Appeals) in his order do not even touch the fringe of the controversy raised before us. These authorities support the proposition that payment of instalment of advance tax on specified dates is not a condition precedent for payment of interest under Section 214. The decision of the Tribunal cited on behalf of the revenue and the board's instructions, a copy whereof has been placed before us, also do not throw any light on the controversy before us.

10. For the foregoing reasons, we allow the appeal. The order passed by the Commissioner (Appeals) on the point under consideration is set aside and that of the ITO is restored.


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