1. This appeal has been filed by the assessee against the order of the CIT(A).
2. A very interesting issue is involved in this appeal - whether the assessee is liable to pay any interest under Section 215 though there was no statutory obligation upon it to file any statement of advance-tax and pay advance-tax as per Section 209. In order to decide this controversy it is necessary to appreciate the facts giving rise to the same. The assessee is an old assessee, that is to say, being previously assessed by way of regular assessment under the provisions of the Income-tax Act. In terms of Section 209A it voluntarily filed statement of advance-tax on 14-6-1978 estimating the income at Rs. 2,00,000 for the year under consideration and the tax payable thereon was at Rs. 1,15,500. Subsequently the assessee revised the estimate and filed another estimate of advance-tax on 14-12-1978 therein estimating the income at Rs. 1,25,000 and tax payable thereon at Rs. 72,190. In the original assessment the ITO charged interest of Rs. 4,34,727 under Section 215. In the appeal against the said assessment the CIT(A) held at para 14 of his appellate order dated 14-2-1983 in Appeal No. 142/ CIT(A) C-I/82-83 that at the time when the estimate of advance-tax was filed the assessment of the assessee for assessment year 1976-77 had only been completed and that according to the said assessment order the appellant was entitled to carry forward unabsorbed depreciation and defiancy under Section 80J to the extent of Rs. 24,48,102. The CIT(A) in the said order had stated that the income-tax return of the assessee for the assessment year 1977-78 showed a profit of Rs. 18,69,091 which was before set off of carry forward losses and further that the income-tax return of the assessee for assessment year 1978-79 showed a loss of Rs. 5,28,938. Therefore, according to the CIT(A) when the statement of advance-tax for the assessment year under consideration was filed huge amount of carry forward losses were there and, therefore, the statement of advance-tax filed on 14-6-1978 and the revised estimate of advance-tax filed on 14-12-1978 were all redundant as the assessee had no obligation under Section 209A either to file statement of advance-tax or revise the same later on. Therefore, the CIT(A) in that order, dated 14-2-1983 held that the interest under Section 215 was not at all chargeable and he, therefore, deleted the same. Against that order of the CIT(A) dated 14-2-1983 the department came up in appeal before the Tribunal. The Tribunal discussed the issue in detail in its order dated 8-11-1985 in ITA No. 192(Cal.)/1983 and held that appeal against the charging of interest under Section 215 was maintainable because the grievance of the department was that the CIT( A) ought not to have entertained the appeal at all in relation to the levy of interest under Section 215. After the order of the Tribunal the ITO passed another order taking into consideration the application made by the assessee for waiver of interest and worked out the interest at Rs. 1,74,153. Against the said order of the ITO the matter was again taken before the CIT(A) wherein it was contended that interest under Section 215 was not at all leviable in this case and the assessee denied the liability for charging of any interest under Section 215.
The CIT( A) through his order now impugned in the present appeal after elaborate discussion held that the assessee was liable for interest under Section 215 as the conditions laid down therein were clearly attracted.
It is against this finding of the CIT(A) that the assessee got aggrieved and has come up in appeal before us.
3. It is submitted by the assessee's counsel, Sri Salarpuria that the provision of Section 209A was introduced with effect from 1-6-1978 and accordingly assessees were expected to file statement of advance-tax payable before 15-6-1978 which was to be filed after computation of current income to be made in accordance with the provisions of Section 209. The counsel for the assessee contends that as on 15-6-1978 last completed assessment of the assessee company was for the assessment year 1978-79 made on 20-9-1977 computing income at nil. The assessee company filed its income-tax return for the assessment year 1978-79 on 14-8-1978 declaring a loss of Rs. 5,28,939. Therefore, in order to comply with the provisions of Section 209A there should be a computation of income in accordance with the provisions of Section 209 and since on the basis of earlier' assessment records the assessee had no income nor any tax was paid under Section 140A consequently the income liable to advance-tax was nil. The logical conclusion, therefore, will be that no statement of advance-tax is required to be filed by the assessee company under Section 209 A. Yet the assessee erroneously and inadvertently filed a statement of advance-tax on 14-6-1978 and thereafter revised on 14-12-1978. The counsel for the assessee argues that if an assessee does any act which is not mandatory or obligatory on him under law then performing such act cannot make him liable of any adverse consequences under the provisions of the Income-tax Act. Thus, in short, according to Sri Salarpuria, the statement of advance-tax and the revised estimate of advance-tax are all invalid and no cognisance should have been taken by the assessing officer and then invoke the provision of Section 215 or Section 273 and put the assessee in adverse consequences. The CIT(A), therefore, went wrong in the impugned order in holding that the levy of interest under Section 215 was proper.
4. The learned departmental representative, Sri D.S. Roy, submits that though there was no obligation on the part of the assessee to comply with the provision of Section 209A yet since the assessee had filed statement of advance-tax voluntarily and then later revised it clearly proves that the assessee considered itself liable to advance-tax. The ITO rightly charged interest under Section 215 as the advance-tax paid was less than the assessed tax by more than 75%. He also relied on the orders of the authorities below and submits that no interference is called for in the impugned order of the CIT(A).
5. After hearing the submissions made before us by the representatives of the assessee and revenue we arc of the opinion that no interest was chargeable under Section 215 looking into the facts of the present case. The provisions of Section 215 are reproduced hereunder: Interest payable by assessee.- (1) Where, in any financial year, an assessee has paid [advance tax under Section 209A or Section 212 on the basis of his own estimate (including revised estimate)], and the advance tax so paid is less than twenty-five per cent of the assessed tax, simple interest at the rate of twelve percent per annum from the 1st day of April next following the said financial year up to the date of the regular assessment shall be payable by the assessee upon the amount by which the advance tax so paid falls short of the assessed tax.
Thus, the liability under Section 215 is attracted if there is shortfall of 25% of the assessed tax over advance-tax which the assessee was required to pay either under Section 209 A or under Section 212 on the basis of his own estimate including a revised estimate. Therefore, there should be payment of advance-tax on the basis of estimate of advance-tax as per Section 209A or Section 212.
Now when we refer to Section 209A we find that every assessee shall in each financial year as to file a statement of advance-tax computing his estimated or current income in the manner laid down in Section 209. The assessee has also been given the right to revise the estimate of advance-tax and either increased or decreased the quantum of advance-tax during the financial year. It is worthwhile to reproduce the provision of Section 209A which has come into effect from 1-6-1978 by virtue of Finance Act, 1978: 209A. Computation and payment of advance lax by assessee.- (1) Every person shall, in each financial year [on or before the date] on which the first instalment, or where he has not previously been assessed by way of regular assessment under this Act [on or before the date] on which the last instalment, of advance tax is due in his case under Sub-section (1) of Section 211, if his current income is likely to exceed the amount specified in Sub-section (2) of Section 208, send to the Income-tax Officer- (a) where he has been previously assessed by way of regular assessment under this Act, a statement of advance tax payable by him computed in the manner laid down in Clause (a) or, as the case may be, Sub-clause (i) of Clause (d) of Sub-section (1) of Section 209, or (b) where he has not previously been assessed by way of regular assessment under this Act, an estimate of- (ii) the advance tax payable by him on the current income calculated in the manner laid down in Section 209, (I) in a case falling under Clause (a) as accords with the statement in equal instalments on the dates applicable in his case under Section 211; and (II) in a case falling under Clause (b), as accords with the estimate in equal instalments on such of the dates applicable in his case as have not expired, or in one sum if only the last of such dates has not expired].
(2) Where an assessee who is required to send a statement under Clause (a) of Sub-section (1) estimate [on or before the date] on which the first instalment of advance tax is due in has case under sub- section(1)of Section 211 that, by reason of his current income being likely to be less than the income on which advance tax is payable by him under Sub-section (1) or for any other reason, the amount of advance tax computed in the manner laid down in Section 209 on the current income would be less than the amount of advance tax payable by him under Sub-section (1), he may send to the Income-tax Officer, in lieu of such statement, an estimate of- (ii) the advance tax payable by him on the current income calculated in the manner laid down in Section 209, and shall pay such amount of advance tax as accords with his estimate in equal instalments on the dates applicable in his case under Section 211.
(3) Where an assessee who has sent a statement under Clause (a) of Sub-section (1) estimates [on or before the date on which] the last instalment of advance tax is due in his case that by reason of his current income being likely to be less than the income on which advance tax is payable by him under Sub-section (1) or for any other reason, the amount of advance tax computed in the manner laid down in Section 209 on the current income would be less than the amount of advance tax payable by him under Sub-section (1), he may, at his option, send to the Income-tax Officer an estimate of- (ii) the advance tax payable by him on the current income calculated in the manner laid down in Section 209, and shall pay such amount of advance tax as accords with his estimate in equal instalments on such of the dates applicable in his case under Section 211 as have not expired, in one sum if only the last of such dates as not expired.
(4) In the case of any assessee who is liable to pay advance tax under Sub-section (1) or Sub-section (2) or, as the case may be, Sub-section (3), if, by reason of the current income being likely to be greater than the income on which the advance tax so payable by him has been computed or for any other reason, the amount of advance tax computed in the manner laid down in Section 209 on the current income (which shall be estimated by the assessee) exceeds the amount of advance tax so payable by him by more than 331/3 per cent of the latter amount, he shall [on or before] the date on which the last instalment of advance tax is payable by him, send to the Income-tax Officer an estimate of- (ii) the advance tax payable by him on the current income calculated in the manner laid down in Section 209, and shall pay such amount of advance tax as accords with his estimate on such of the dates applicable in his case under Section 211 as have not expired, by instalments which may be revised according to Sub-section (5): Provided that in a case where the Commissioner is satisfied that, having regard to the nature of the business carried on by the assessee and the date of expiry of the previous year in respect of such business, it will be difficult for the assessee to furnish the estimate required to be furnished by him in accordance with the provisions of this subsection [on or before the date] on which the last instalment of advance tax is due in his case, he may, if the assessee pays the advance tax which he is liable to pay under Sub-section (1) or Sub-section (2) or, as the case may be, Sub-section (3) [on or before such date] extend the date for furnishing such estimate up to a period of thirty days immediately following the last date of previous year in respect of that business and, where the date is so extended, the assessee shall pay, on or before the date as so extended, the amount by which the advance tax already paid by him falls short of the advance tax payable in accordance with his estimate.
(5) The assessee may send a revised estimate of the advance tax payable by him [on or before any one of the dates] specified in Section 211 and adjust any excess or deficiency in respect of any instalment already paid in a subsequent instalment or in subsequent instalments.
(6) Every statement or estimate under this section shall be sent in the prescribed form and verified in the prescribed manner.
Explanation: For the purposes of this section and Section 211 'Current income', in relation to the advance tax payable by an assessee during any financial year, means the total income of the assessee [exclusive of capital gains and income referred to in Sub-clause (ix) of Clause (24) of Section 2, if any] of the period which would be the previous year for the assessment year immediately following that financial year.
To appreciate the provision of Section 209A it is also necessary to note Section 209 which lays down that the amount of advance-tax payable by an assessee in the financial year shall be computed as follows: (a)(i) his total income of the latest previous year in respect of which has been assessed by way of regular assessment shall first be ascertained; (ii) the amount of capital gains [and income referred to in Sub-clause (ix) of Clause (24) of Section 2], if any, included in such total income shall be deducted therefrom, and on the balance, income-tax shall be calculated at the rates in force in the financial year; (iii) the income-tax so calculated shall be reduced by the amount of income-tax which would be deductible during the said financial year in accordance with the provisions of Sections 192 to 194, Section 194A, Section 194C, Section 194D and Section 195 on any income (as computed before allowing any deductions admissible under this Act) on which tax is required to be deducted under the said sections and which has been taken into account in computing the said total income; (iv) the net amount of income-tax calculated in accordance with Sub-section (iii) shall, subject to the provisions of Clauses (c) and (d), be the advance-tax payable; Section 208 states that advance-tax shall be payable during the financial year where total income exclusive of capital gain and income referred to in Section 2(24)(ix) of the assessee referred to in clause 209(i)(a) exceeds the amount specified in Sub-section (2) or where it is payable by virtue of the provision of Section 209 A. Therefore, Section 209A(i)(a) requires that every person who has been previously assessed by way of regular assessment under the Act shall in each financial year on or before the date on which the first instalment of advance-tax is due in his case, if his current income is likely to exceed the amount specified in Section 208(2) send to the ITO a statement of advance-tax payable by him computed in the manner laid down in Section 209(1 )(a). The provision of Sub-clause (1) also calls for the payment of that amount of advance-tax. Section 209(1)(a) requires that an assessee's total income of the latest previous year in which he has been assessed by way of regular assessment shall first be ascertained, that certain deductions shall be made therefrom and that the amount of any amount of income-tax thereon as so computed shall be the advance-tax payable. Admittedly the assessee has been assessed to nil income for the assessment year 1977-78. Even for the assessment year 1978-79 the return was declaring a loss of Rs. 5,28,939.
Computation if made as laid down under Section 209(1)(a) therefore, did not made the assessee company liable to payment of advance-tax. There being no advance-tax payable by the assessee company there was no obligation cast upon it by Section 209A(1)(a) to send to the ITO the statement contemplated thereby. Under Section 209A(1)(a) the obligation of an assessee who has been previously regularly assessed to tax is to compute the advance-tax payable in the manner provided by Section 209(1 )(a) to send a statement of such computation to the ITO and to pay the amount of tax in advance on the basis of the computation so made. The assessee is thus obliged to send under Section 209A(1)(a) a statement of the computation of advance-tax payable by him as provided in Section 209(1)(a). If upon such computation being made by the assessee no advance-tax is found to be payable then there is no advance-tax payable. There being no "advance-tax payable" there is no obligation under Section 209A(1)(a) to send to the ITO a statement of such computation. The purpose and object of sending the statement under Section 209 A( 1) is to make known to the ITO the computation upon which the figure of advance-tax has been arrived at. Whereupon such computation made by the assessee under Section 209(1 )(a) no advance-tax is payable then there is no purpose in sending to the ITO the statement of its computation vis-a-vis the advance-tax payable. In this view of the matter it can be clearly held that the assessee company was not obliged to send to the ITO the statement referred to in Section 209A(1)(a). It is a well-settled principle of jurisprudence that no person can be put to sufferance or made liable for any adverse consequences for doing or performing an act which in law he was not obliged or directed to do or perform. Thus, in our view when the assessee was not directed or obliged by law to file a statement or estimate of advance tax under Section 209 A be cannot be made liable for any interest under Section 215 or for that matter any penalty under Section 273. The statement and estimate of advance-tax thus filed by the assessee company were invalid and non est in law. This view of ours also gets support from the ratio of the decision of Calcutta High Court in the case of Babulal Newar v. CIT [1978] 112 ITR 399 and of the Bombay High Court in the case of Patel Aluminium (P.) Ltd. v. Miss K.H.Tawadia, IT0 [1987] 165 ITR 99. We, therefore, direct the ITO to delete the interest levied under Section 215 and if in the mean time, the same has been paid by the assessee company to refund the same in accordance with law.