Advance tax estimate penalty under section 273(a) fails where the recorded material supports the assessee's estimated income.

Penalty under section 273(a) for filing an untrue estimate of income for advance tax purposes was held unsustainable because the material on record supported the assessee's asserted estimate of Rs. 46,000, even though the estimate itself could not be traced from the record. The assessed income of Rs. 51,580 did not place the estimate beyond the permissible limit for advance tax purposes, so the estimate could not be treated as an under-estimate attracting penalty. The levy was therefore not exigible.

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Issues: Whether penalty under section 273(a) of the Income-tax Act, 1961 was exigible on the footing that the assessee had filed an untrue estimate of income for advance tax purposes.

Analysis: The estimate filed by the assessee could not be traced from the record, but the material on record, including the advance tax paid on the basis of the asserted estimate, supported the assessee's case that the estimated income was Rs. 46,000. On that basis, the assessed income of Rs. 51,580 did not place the estimate outside the permissible limit so as to justify treating it as an under-estimate attracting penalty.

Conclusion: Penalty under section 273(a) was not exigible and the levy was unsustainable.

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