TaxTMI 
TaxTMI 
1990 (2) TMI 90
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.... tax in advance in respect of the assessment year 1980-81. 3. The assessee was one who had previously been assessed by way of regular assessment. Section 209A(1)(a) requires that a person, who has previously been assessed by way of regular assessment, is required to file, in each financial year, on or before the date on which the first instalment of advance tax is due to be paid, the statement of advance tax payable by him. In this statement of advance tax, the tax payable is to be computed on the basis of total income of the latest previous year in respect of which he has been assessed by way of regular assessment or on the basis of the total income of the latest previous year on the basis of which tax has been paid under self-assessmen....
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....ity on the current income exceeds the aforesaid liability by more than one-third of the aforesaid liability, then advance tax is required to be paid on the basis of the current income. 4. The previous year relevant to the assessment year 1980-81 which is now under consideration had ended on 30-6-1979. Since the assessee had previously been assessed by way of regular assessment, as per the provisions of section 209A(1)(a), she was required to file a statement of advance tax payable by her, by 15th June, 1979, by which time the first instalment of advance tax was due to be paid. The assessee did not file the statement of advance tax. Instead, she filed an estimate of advance tax payable by her, on 13-6-1979. As per this estimate, the liabi....
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....t of tax determined on assessment. If the advance tax paid by an assessee exceeds the amount of tax determined on assessment, interest under section 214 is payable on the amount paid in excess of the tax determined on assessment. The ITO, hence, allowed interest to the assessee under section 214. Later, on the scrutiny of the records, the CIT was of the view that the ITO was in error in allowing interest under section 214. He was of the view that the payment of Rs. 84,266 which had been made by the assessee could not be regarded as being payment of advance tax and, as such, the assessee was not entitled to get any interest under section 214. According to the CIT, the estimate filed by the assessee was no estimate in the eye of law and any p....
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....sessee under section 214. The assessee has felt aggrieved by this order of the CIT and has come up in appeal before us. The contention of the assessee is that it was an erroneous conclusion on the part of the CIT that the estimate filed by her was no estimate in the eye of law. It is contended that the estimate filed was a valid estimate and the sum of Rs. 84,266 which has been paid on the basis of that estimate is required to be regarded as being advance tax. 5. We have considered the matter carefully. The current income of the assessee was more than the income of the latest previous year for which she had been assessed by way of regular assessment. But it was not higher by such an extent as to oblige the assessee to file estimate under....
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....l and the payment made by the assessee is not to be recognised as advance tax, then the result will be that an assessee who has paid tax more than what he was required to pay will be put at par with one who has not paid anything. It is difficult to accept such an interpretation which may lead to this odd result. The difficulty, we think, has arisen on account of the fact that the Department is only taking into consideration the provisions of sub-section (4) of section 209A and is not being guided by the general scheme of the payment of advance tax. If attention is also paid to the general scheme of payment of advance tax, then we do not think that it will be possible to hold that the estimate filed by the assessee is no estimate in the eye ....
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....of the income of the previous year relevant for advance tax. Realising this, scope has been provided for the filing of the estimate. The current income of the assessee may be less than the income on the basis of which advance tax is payable by him as per statement of advance tax required to be furnished under section 209A(1)(a). In such a case, a right is given to the assessee to estimate his income of the relevant previous year and pay advance tax on the basis of his own estimate. At the same time, the interest of the revenue has also been safeguarded. It has been provided that in case the tax liability on the current income is likely to exceed the tax liability as per statement of advance tax by one-third of the tax liability as per state....