Advance tax payment requires a statutory estimate; cheque payment alone did not prevent penalty under section 273(a).

A cheque tendered towards advance income-tax could not be treated as valid payment where the assessee failed to file the statutory revised estimate required under the advance-tax scheme. Even though the general rule on cheques being treated as paid on honour was acknowledged, that principle did not override the specific statutory condition that a proper estimate must accompany payment on the assessee's own computation. On that basis, the payment was ineffective for avoiding penalty, and penalty under section 273(a) was held to be leviable.

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Issues: Whether the payment of Rs. 76,150 by cheque on 15 March 1961 could be treated as payment of advance income-tax, and whether the penalty under section 273(a) of the Income-tax Act, 1961 was sustainable.

Analysis: Under section 18A of the Indian Income-tax Act, 1922, an assessee seeking to pay less than the amount demanded as advance tax was required to furnish an estimate of tax payable, and a revised estimate had to be sent before the relevant due date. The assessee sent the cheque without filing any revised estimate, and the earlier estimate had been found to be untrue. The payment therefore could not be regarded as a valid payment of advance tax for the purpose of avoiding penalty. On the cheque issue, the general rule that a cheque, if honoured, relates back to the date of delivery was accepted, but that principle did not assist the assessee because the statutory requirement of a proper estimate remained unsatisfied.

Conclusion: The cheque payment without the required estimate was not payment of advance income-tax, and the penalty under section 273(a) was rightly leviable; the answer was in favour of the Revenue.

Ratio Decidendi: Where the advance-tax scheme requires a timely estimate as a statutory condition for payment on the assessee's own computation, a cheque sent without such estimate cannot be treated as valid advance-tax payment merely because the cheque is later honoured.

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