Law:

Section:

Section 7C of the Companies (Profits) Surtax Act, 1964 - Interest payable by assessee - Assessment year 1983-84 - Whether when an obligation is created to pay surtax under section 7A and liability is also created to pay interest on difference of advance surtax paid and surtax made payable by assessee as determined by assessing authority, assessee for his default either in not paying advance surtax or by filing a nil estimate cannot escape his liability to pay interest in terms of section 7C - Held, yes FACTS The assessee-company was engaged in the manufacture of wines and spirits. The assessee filed a nil estimate of the advance surtax. While completing the assessment, the Assessing Officer determined the amount of surtax to be paid by the assessee and charged the interest under section 7C. The Commissioner (Appeals) as well as the Tribunal sustained the levy of interest under section 7C. On reference : HELD When an assessee is required to pay advance surtax under section 7A on the basis of estimated income, the default in payment of advance surtax on estimated income by filing only a nil estimate, should not enure to the benefit of the assessee to contend that it was not liable to pay interest, on the ground that it has filed only a nil estimate and he has not paid the advance surtax. Therefore, merely because the assessee either files a nil estimate or does not pay the advance surtax as provided under section 7A, the assessee cannot be allowed to contend that the assessee is not liable to pay interest on the entire surtax made payable by the assessee by the assessing authority. When an obligation is created to pay surtax under section 7A and the liability is also created to pay interest on the difference of advance surtax paid and the surtax made payable by the assessee as determined by the assessing authority, the assessee for his default either in not paying the advance surtax or by filing a nil estimate cannot escape his liability to pay interest in terms of section 7C. The liability to pay advance surtax under section 7C cannot be interpreted to give handle to an assessee who files a nil estimate as against the assessees who file the estimates and the…

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