Advance tax estimate penalty applies only for failure to file an estimate, not for non-payment on a valid estimate.

Penalty under section 273(c) of the Income-tax Act is attracted only on failure to furnish an estimate of advance tax in accordance with section 212(3A), not merely because tax on a validly filed estimate was unpaid. The estimate placed before the appellate authority showed that the assessee had in fact furnished an estimate broadly consistent with returned income, so the proceedings could not proceed on the basis that no estimate was filed. On that reasoning, the analogous position under section 18A of the 1922 Act also supported the view that the penalty provision for non-furnishing of an estimate could not be used to penalise non-payment alone.

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Issues: Whether penalty under section 273(c) of the Income-tax Act, 1961 could be levied where the assessee had filed an estimate of advance tax but did not pay the tax on that estimate.

Analysis: The estimate produced before the appellate authority showed that the assessee had in fact furnished an estimate, and the figure was broadly in line with the returned income. The proceedings had not proceeded on the footing that no estimate was filed. Section 273(c) applies where there is a failure to furnish an estimate of advance tax in accordance with section 212(3A), and not to a case where a valid estimate has been filed but the tax remains unpaid. The analogous position under section 18A of the Income-tax Act, 1922 also supported the view that penalty for non-payment could not be imposed under the provision dealing with failure to furnish an estimate.

Conclusion: Penalty under section 273(c) was not leviable and had to be cancelled.

Ratio Decidendi: Where an assessee has furnished a valid estimate of advance tax, the penalty provision for failure to furnish an estimate cannot be invoked merely because the tax on that estimate was not paid.

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