Law:

Section:

- Sections 212, 217 (2) and 273 (b) - Income-tax Act, 1961 CASE REFERRED TO CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC). JUDGMENT B.K. Mehta, J.-A short but interesting question arises about the date as on which penalty under section 273(b) read with section 273(ii) of the Income-tax Act, 1961, may be levied. The dispute arises out of the following question which has been referred to us for opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that Rs. 1,83,000 paid by the assessee on March 26, 1965, should be treated as valid advance tax and should be deducted from 75 per cent of the tax determined for arriving at the basis for imposing the penalty under section 273(b) of the Income-tax Act, 1961 ?" 2. Shortly stated the facts leading to this reference are as under : The assessee is a private limited company. The relevant assessment year is 1965-66. Before this assessment, the assessee-company was not assessed previously. It was, therefore, liable to file an estimate of advance tax payable under section 212(3) and pay tax accordingly. The estimate was to be filed before 1st March, 1965, and the advance tax was to be paid before 15th March, 1965. It appears that on 25th March, 1965, the assessee filed an estimate showing an income of Rs. 3,66,000 and paid advance tax of Rs. 1,83,000 on 26th March, 1965. As the estimate was not filed before the due date, that is, 1st March, 1965, the Income-tax Officer imposed penalty of Rs. 4,000. The assessee carried the matter in appeal before the Appellate Assistant Commissioner who held that the assessee was liable to pay penalty but he directed that such penalty should be the minimum leviable under the said section and should be computed on the basis of the tax payable after deducting the amount of Rs. 1,83,000 paid by the assessee on 26th March, 1965. The Income-tax Officer, therefore, carried the matter in appeal before the Tribunal. A contention was raised on behalf of the Income-tax Officer that since the amount of Rs. 1,83,000 was paid after the due date, it should not be treated as part of the advance tax. The Tribunal was of the opinion, on reading…

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