TMI Blog1991 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... n 210 of the Act ; the basis for the demand was the tax assessed on the assessee for the assessment year 1969-70. But, at the time of finalising the assessment for the relevant year (assessment year 1973-74), it was found that the tax payable by the assessee exceeded the advance tax demanded by more than " 1 per cent. which meant that the assessee was under an obligation to file an estimate of his income and the advance tax payable and pay the same as provided under section 212(3A) of the Act. The Income-tax Officer issued a notice asking the assessee's explanation for this failure on the part of the assessee. According to the assessee, his main source of income was from two firms of which he was a partner and he had no knowledge till March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able by an assessee shall be computed having regard to (among other things) his total income of the latest previous year in respect of which he has been assessed by way of regular assessment ; this figure would be substituted by a more recent figure of income, if available. In the case of a partner of a firm, his share in the firm's income, as assessed, is the basis to compute his income for purposes of advance tax (in addition to his income from any other source). Therefore, the Explanation to section 209(1) states that if the assessee is a partner of a registered firm and an assessment of the firm has been completed for a previous year later than the latest previous year for which the assessee's assessment has been completed, his share in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). It is contended that whenever such an amended order is not made, though called for by the statute, the earlier order ceases to be a valid order and hence such an earlier order cannot be held as an effective order made under section 210. If and when an assessment order is made for the latest previous year, the earlier demand for advance tax based on the earlier assessment order requires to be amended and, in that regard, exercise of the amending power under section 210(3) is a mandatory duty, is the basis of the assessee's contention. Under section 209(1)(a), the total income of the latest previous year in respect of which the assessee has been assessed is to be the basis for advance tax ; for the purpose of the advance tax demanded, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is obliged to file an estimate under circumstances stated in the said subsection (3A) of section 212. Section 212(3A) is attracted under the following conditions : (1) The assessee is already required to pay advance tax by an order under section 210 ; (2) The correct income of the assessee is likely to be more than the income on which advance tax under section 210 has been demanded from him, or for any other reason ; (3) The advance tax payable on such current income would exceed, the advance tax demanded under section 210 by 33 1/3 per cent. of the demanded amount. While the language employed in section 210(3) uses the word "may", section 212(3A) uses the word "shall". Prima facie, the word "may" does not create a mandatory duty, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make both the provisions workable in a realistic manner. Section 210(3) cannot be held as creating a mandatory duty, in the light of the Explanation to section 209(1), because section 210(3) governs all kinds of assessees, while the Explanation to section 209(1) is confined to the cases of partners of registered firms. A general provision cannot be interpreted to suit the case of one category of assessees only. The finding of fact, here, is that the assessee knew that his income for purposes of advance tax was higher than the income estimated by the Income-tax Officer, and the order under section 210(1) served on him demanded a small amount, and that the real advance tax would exceed the former by 33 1/3 per cent. It cannot be held, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 212(3A) as the tax demanded under section 210 was far lower and section 212(3A) operated on the situation. A mere inaccuracy in the notice of demand under section 210, it was held, would not vitiate it. As the findings stand, in the instant case, the Income-tax Officer was not aware of the assessment order made by another Income-tax Officer in respect of one of the firms and thus was not in a position to amend his order made earlier under section 210(1). The assessee was presumed to have known his share in the total income of the said firm ; therefore, we are of the view that the assessee was obliged under section 212(3A) to file his estimate of the total income and pay the appropriate advance tax. The levy of penalty under section 273(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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