Law:

Section:

Section 273 of the Income-tax Act, 1961 - Penalty - For false estimate of, or failure to pay advance tax - Assessment year 1976-77 - Whether for calculating amount of tax paid during year, entire amount of advance tax whether it has been paid in time or after due date but not after close of financial year has to be taken into consideration - Held, yes - Whether where amount of tax deposited by assessee did not fall short of 75 per cent of assessed tax, no penalty under section 273 was leviable - Held, yes FACTS The assessee filed its estimate in Form No. 29 on 8-9-1975 showing advance tax payable. On 15-3-1976, it filed another estimate of tax. Since the latter estimate filed was late, it was treated as invalid and former estimate filed was taken into consideration at the time of the assessment. The income which was disclosed by the assessee was enhanced as a result of an order passed under section 273 by the Commissioner. The ITO initiated proceedings for imposition of penalty under section 273 on the ground that the assessee had filed statement of advance-tax payable by him which he had reason to believe to be untrue. As the tax paid by the assessee fell short of 75 per cent of the assessed tax, he imposed penalty. On appeal, the Commissioner (Appeals) deleted the penalty, which order was affirmed by the Tribunal. On reference: HELD From a reading of the provisions of section 273, it appears that even where an estimate of advance tax has been incorrectly filed or is untrue, the quantum of penalty is to be calculated with reference to the tax paid during the financial year immediately preceding year which falls short of 75 per cent of the assessed tax or the amount of tax payable where the notice under section 210 was issued to the assessee, whichever is less. In the instant case, the amount of tax deposited by the assessee did not fall short of 75 per cent of the assessed tax and, therefore, no penalty was leviable. In that view of the matter, the order of the Commissioner (Appeals) deleting the penalty did not suffer from any legal infirmity. [Para 3] For calculating the amount of tax paid during the year, the entire amount of advance tax whether it has been…

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