ORDER
P.D. Dinakaran J.
1. Heard both the parties.
2. In Writ Petition No. 7031 of 1988, the petitioner has prayed for issue of a writ of certiorarified mandamus, calling for the records of the case on the file of the first respondent herein in C. No. 1511/10 (1&2) of 1986-87 Cent. I to quash the impugned order of the first respondent in C. No. 1511/10 (1&2) 1986-87 Cent. I dated March 20, 1987, for the assessment year 1982-83 under the Income-tax Act, 1961, direct the first respondent to grant interest under section 214 of the Income-tax Act and waive the interest under section 139(8) of the Income-tax Act, 1961.
3. In Writ Petition No. 7086 of 1988, the petitioner has prayed for issue of a writ of certiorarified mandamus, calling for the records of the case on the file of the first respondent in C. No. 1511/10 (1&2)/86/87 Cent. I, quash the impugned order of the first respondent in C. No. 1511/10 (1&2) /86/87 Cent. I dated March 20, 1987, and for the assessment year 1983-84 under the Income-tax Act, 1961, direct the first respondent to grant interest under section 214 of the Income-tax Act and waive the interest under section 139(8) of the Income-tax Act, 1961.
4. Except for the fact that W.P. No. 7031 of 1988 relates to the assessment year 1982-83 and W.P. No. 7086 of 1988 relates to the assessment year 1983-84, the grievance of the petitioner, the legal-contentions and the relief sought for in challenging the impugned proceedings in the respective writ petitions are identical, and, therefore, I heard both the writ petitions together.
5. The admitted facts of the case are stated as follows :
The petitioner in both the writ petitions carries on business in dairy farming. For the assessment years 1982-83 and 1983-84, the petitioner filed returns admitting an income of Rs. 43,119 and Rs. 42,806, respectively. The second respondent by an order of assessment dated March 13, 1986, made an estimate of the income at Rs. 64,000 and Rs. 60,000 for the assessment years 1982-83 and 1983-84, respectively. After granting the statutory deduction, the second respondent fixed, the tax liability at Rs. 21,670 and Rs. 19,470 for the assessment years 1982-83 and 1985-84 respectively. Since the assessee had paid an advance tax of Rs. 31,300 for both the assessment years, after giving credit to the tax, the second respondent ordered a refund of Rs. 6,204 in each case and levied a sum of Rs. 5,886 and Rs. 5,626 by way of interest under section 139(8) of the Income-tax Act, 1961, treating the payment of advance tax as ad hoc payment since the assessee had filed estimates in the form of a statement in Form No. 28-A instead of in Form No. 29.
The petitioner in both the writ petitions preferred a revision before the first respondent under section 264 of the Income-tax Act, 1961, contending that the mere non-filing of the returns (sic) in Form No. 29 could not take away the character of payment as advance tax on estimation because the petitioner had filed the returns in Form No. 28A and also paid the advance tax accordingly, and, therefore, the technical mistake, in not filing the correct form will not stand in the way of granting the statutory interest under section 214 of the Income-tax Act, on the excess tax found to be refundable to the petitioner. However, the first respondent by his proceeding dated March 20, 1987, declined to waive the interest under section 139(8), and refused to grant interest under section 214 of the Income-tax Act. Hence, the above writ petitions.
6. Mrs. Aparna Nandakumar, learned counsel for the petitioner, challenges the impugned, proceedings and contends that the respondents failed to see that the petitioner had already filed the estimate of income before the Income-tax Officer in Form No. 28A instead of Form No. 29, and, therefore, such technical flaw could not obliterate the fact that the petitioner had in fact, paid the advance tax, She further contends that since the respondents have admitted the fact that the advance tax has been paid, they should have allowed the interest on the same under section 214 of the Income-tax Act, 1961, and treating the advance tax as ad hoc payment is arbitrary and unreasonable. In any event, learned counsel for the petitioner contends that levy of interest under section 139(8) of the Act, as though no advance tax has been paid is again perverse and arbitrary. In support of her contentions,, learned counsel for the petitioner has relied upon the following decisions :
(1) CIT v. T. T. Investments, and Trades Pvt. Ltd. : [1984]148ITR347(Mad) .
(2) J and J Dechane v. CIT : [1990]182ITR345(AP) .
(3) New India Maritime Agencies Pvt. Ltd. v. CIT : [1995]216ITR76(Mad) .
(4) CIT v. Roadmaster Industries of India (Pvt.) Ltd. .
7. Per contra, learned counsel for the respondent contends that when the statute prescribes certain format for filing returns and estimation and for the payment of advance tax, the assessees are expected to adopt the format prescribed in the statute. Having not furnished the same as required under law, the petitioner is not entitled to complain against the respondents and claim benefit under the Act.
8. I have given anxious consideration to the submissions of both the sides.
9. As rightly pointed out by learned counsel for the petitioner, the decision in CIT v. T. T. Investments and Trades Pvt. Ltd. : [1984]148ITR347(Mad) has a direct bearing on the instant case. In the said decision, it was held as follows (headnote) :
'For the assessment year 1972-73 the assessee had, apart from tax deducted at source, paid a total amount of Rs. 1,85,200 towards advance tax. As the tax payable on completion of the assessment was only Rs. 80,176, the assessee was entitled to a refund of Rs. 1,67,525. Though the Income-tax Officer while completing the assessment granted interest under section 214 on this sum, subsequently he took the view that the payments by the assessee of, inter alia, a sum of Rs. 1,74,466 on December 22, 1971, could not be treated as payment of advance tax inasmuch as the same had been paid beyond the due date mentioned in section 208, and, accordingly, the Income-tax Officer rectified the assessment to cancel the interest under section 214 originally granted. The Appellate Assistant Commissioner, however, following the decision in CIT v. Sharma Construction Co. : [1975]100ITR603(Guj) , held that the payment made on December 22, 1971, should be treated as payment of advance tax and, consequently, the assessee would be entitled, to interest under section 214. This was confirmed by the Tribunal. On a reference, it was held that though the payment made on December 22, 1971, was late by seven days, the due date being December 15, 1971, so long as the Revenue had accepted the payment though made belatedly, the character of the amount received by the Revenue could only be advance tax and not an ad hoc payment. Though the assessee may be proceeded against for non-payment of the advance tax on the due date, so long as the payment is accepted it can only be towards advance tax. Any payment made before the end of the accounting year for which the assessment is made should be taken as advance tax. Consequently, the assessee was entitled to interest under section 214 on the payment in question.'
10. But in the instant case, admittedly, there is not even a delay in payment of the advance tax. The advance tax, is paid in time.
11. In J and J Dechane v. CIT : [1990]182ITR345(AP) , the Division Bench of the Andhra Pradesh High Court, following the principles laid down by the apex court in Hindustan Steel Ltd. v. State of Orissa : [1972]83ITR26(SC) , held as follows (page 351) :
'Assuming that the Income-tax Officer is right in relying on the above technicalities, it does not automatically follow that the Officer should impose a penalty as if the assessee acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct or that he acted in conscious disregard of his obligation. The Income-tax Officer should have taken note of the fact that, notwithstanding the hypertechnical view entertained by him, the assessee acted fairly And honestly in filing a revised estimate and in paying a substantial amount of tax. Taking note of these two facts, the Income-tax Officer should have held that even if penalty is leviable under law, he would refuse to levy penalty because there is only a technical or venial breach of the provisions of the Act.'
12. In the said decision, the learned judges of the Andhra Pradesh High Court followed the principles laid down by the apex court in Hindustan Steel Ltd. v. State of Orissa : [1972]83ITR26(SC) which read as follows (page 350) :
'An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.'
13. In the third decision relied on by learned counsel for the petitioner, in New India Maritime Agencies Pvt. Ltd. v. CIT : [1995]216ITR76(Mad) , it was held as follows (headnote)
'For the assessment year 1976-77, the Income-tax Officer levied interest under section 139(8) of the Income-tax Act, 1961, for delay in filing the return, although the assessee had paid advance tax over and above what was due as tax. The Tribunal upheld the order of the Income-tax Officer on the ground that interest was chargeable under section 139(8) as the advance tax was not paid within time and, therefore, it could not be considered as advance tax. On a reference, it was held, that so long as the payment was accepted, it could only be towards advance tax. Any payment made before the end of the accounting year for which assessment was made should be taken as advance-tax. Since the amount paid by the assessee was accepted by the Income-tax Officer as advance tax and the amount paid was over and above what was due by way of tax, no interest under section 139(8) could be levied.'
14. Similarly, in CIT v. Roadmaster Industries of India (P.) Ltd. , it was held as follows (page 642) :
'The preponderance of judicial opinion, is, however, to the contrary. There is a string of judicial precedents expressing the view that the Legislature intended to provide that, irrespective of the dates on which the instalments of advance tax are paid, interest would be payable on the excess advance tax paid, if two conditions are satisfied : (i) that the entire amount of advance tax is paid up; and (ii) it is paid up before the end of the financial year.'
15. In the instant case, since there is no dispute that the petitioner has satisfied both the conditions, the benefit of interest on the advance tax cannot be denied.
16. In the light of the above decisions, I am satisfied that the impugned orders are liable to be quashed. Thus, while quashing the impugned orders, the matter is remitted to the second respondent, with a direction to consider and pass appropriate order on merits within a period of six weeks from the date of receipt of copy of this order, in the light of the decisions relied upon by learned counsel for the petitioner which are referred to above.
17. In the result, the writ petitions are allowed as mentioned above. However, there will be no order as to costs. Consequently, the connected WMPs are closed.