Distinct assessee status under tax law can preserve HUF classification while still triggering advance tax interest.

An assessment in the status of a Hindu undivided family was treated as distinct from assessment as an individual, so a prior individual assessment did not preclude the assessee's later claim to HUF status. On that basis, the HUF status issue was resolved in favour of the assessee. For advance tax, assessment in one legally distinct status did not satisfy the requirement of prior regular assessment in the HUF status under section 212(3), so the obligation to file an estimate remained. Because no estimate was filed and no advance tax was paid, interest under section 217 was held leviable, and estoppel did not assist the assessee.

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Issues: (i) Whether the assessee was correctly assessable in the status of a Hindu undivided family; (ii) Whether interest under section 217 of the Income-tax Act, 1961 was leviable for failure to file an advance tax estimate where the assessee had earlier been assessed as an individual.

Issue (i): Whether the assessee was correctly assessable in the status of a Hindu undivided family.

Analysis: The relevant statutory scheme treated an individual and a Hindu undivided family as distinct categories of assessee. A prior assessment in one status did not amount to a prior assessment in the other. Since the assessee was found entitled to be assessed as a Hindu undivided family, the earlier assessment as an individual did not conclude the question of status for later years.

Conclusion: The issue was decided in favour of the assessee. The assessee was correctly assessable as a Hindu undivided family.

Issue (ii): Whether interest under section 217 of the Income-tax Act, 1961 was leviable for failure to file an advance tax estimate where the assessee had earlier been assessed as an individual.

Analysis: Section 212(3) fastened the obligation to file an estimate on a person not previously assessed by way of regular assessment. The Court held that assessment as an individual did not satisfy the requirement of prior assessment of the Hindu undivided family. On the facts, the assessee had not filed the estimate or paid advance tax, and the plea of estoppel failed because the assessee himself had consistently claimed the Hindu undivided family status and succeeded on that very basis.

Conclusion: The issue was decided in favour of the Revenue. Interest under section 217 was leviable.

Final Conclusion: The references were answered partly for the assessee and partly for the Revenue, with no answer called for on the un-referred question.

Ratio Decidendi: For purposes of advance tax liability under section 212(3), assessment in one status does not amount to prior assessment in a different and legally distinct status; consequently, failure to comply with the advance tax provisions attracts interest under section 217.

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