Advance-tax penalty not leviable where no tax liability existed on the due date and filing obligation never arose.

Penalty under section 273(1)(b) was held unsustainable because the obligation to file an advance-tax statement arises only where advance tax is actually payable. On the due date, the assessee had no assessable income giving rise to advance-tax liability, as the earlier assessed income was negative. Since the statutory precondition for filing the statement was absent, penalty could not be levied and was deleted in favour of the assessee.

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Issues: Whether penalty under section 273(1)(b) of the Income-tax Act, 1961 was leviable where, on the due date for filing the advance-tax statement, the assessee's earlier assessed income was negative and no advance tax was payable.

Analysis: The liability to file the statement of advance tax arises only when the assessee is liable to pay advance tax. On the date when the statement became due, the assessee had no assessable income giving rise to advance-tax liability, as the earlier assessed income was in the negative. In those circumstances, the filing of any advance-tax statement did not arise, and the precondition for penalty under section 273(1)(b) was absent.

Conclusion: The penalty was not sustainable and was deleted in favour of the assessee.

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