1978 (3) TMI 41 - HC - Income Tax

Court affirms Commissioner's order on minor son's income, requires advance tax payment. Writ petition dismissed.

The court upheld the validity of the Commissioner's order under section 264 of the Income Tax Act, ruling that the income of the minor son from a ... Inclusion of minor child's partnership share in the assessee's total income - obligation to estimate current income and pay advance tax under the statutory advance-tax scheme - liability to pay interest for failure to comply with advance-tax estimate - distinction between disclosure requirements in return forms and statutory duty to pay advance taxInclusion of minor child's partnership share in the assessee's total income - obligation to estimate current income and pay advance tax under the statutory advance-tax scheme - liability to pay interest for failure to comply with advance-tax estimate - distinction between disclosure requirements in return forms and statutory duty to pay advance tax - Validity of the CIT's order under section 264 upholding interest under section 217(1A) for failure to send an estimate under section 212(3A) by not including the minor son's partnership share in the assessee's advance-tax estimate. - HELD THAT: - The income of the assessee's minor son, admitted to the benefits of the partnership, falls within the assessee's total income by operation of the provision dealing with income of a minor child in computing an individual's total income. 'Current income' for the purpose of the advance-tax estimate in section 212(3A) is to be understood with reference to the total income as defined. Consequently, where the assessee failed to send the estimate of current income (which included the minor's share) as required by section 212(3A), the statutory consequence of liability to interest under section 217(1A) follows. The decision in Muthiah Chettiar was distinguished as addressing disclosure in the prescribed return form and reassessment procedures, and did not concern the separate obligation to estimate and pay advance tax on the aggregate total income which includes the minor's share.The CIT's order confirming interest for non-compliance with the advance-tax estimate obligation was upheld and the writ petition dismissed.Final Conclusion: Writ petition dismissed; the assessee was under a statutory obligation to include the minor son's partnership share in the total/current income for the purpose of advance-tax estimation, and failure to do so rendered him liable to interest as upheld by the Commissioner. Issues: Validity of Commissioner's order under section 264 of the Income Tax Act regarding interest charged on minor son's share income for advance tax payment.In this case, the petitioner, an individual assessee, challenged the order of the Commissioner of Income-tax under section 264 of the Income Tax Act, 1961, regarding the levy of interest on the share income of his minor son for not paying advance tax. The petitioner contended that he was not obligated to estimate his minor son's income for advance tax purposes. The court analyzed relevant provisions such as section 5, section 64, and section 212(3A) of the Act to determine the inclusion of the minor son's income in the total income of the assessee. The court found that the income of the minor son derived from the partnership firm was deemed to be the income of the individual assessee, forming part of the total income. The court emphasized the obligation of the assessee to pay advance tax on the total income, including the minor son's share income, as per section 212(3A).The court also considered a Supreme Court decision cited by the petitioner's counsel, emphasizing that the prescribed form for filing returns did not require disclosure of the minor son's share income. However, the court distinguished this case from the present matter, clarifying that the obligation to pay advance tax on the total income, including the minor son's share income, was distinct from the requirement to disclose such income in the return form. The court reiterated that the liability to pay advance tax on the total income, as defined under section 2(45) of the Act, encompassed the minor son's share income under section 64.Ultimately, the court dismissed the writ petition, upholding the validity of the Commissioner's order and emphasizing the assessee's obligation to pay advance tax on the total income, which includes the share income of the minor son. The court ordered the dismissal of the petition with costs, affirming the requirement for the assessee to comply with statutory provisions regarding advance tax payment on the total income, as outlined in section 212(3A) of the Income Tax Act, 1961.