TMI Blog1981 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... at since all the income was the income on which tax had been deducted at source, the advance tax payable was nil. The estimate had been filed during calendar year 1966 in respect of the assessment year 1967-68. The ITO, however, completed the assessment on a total income of Rs. 16,97,370 (which was reduced by the AAC to Rs. 13,95,256) and eventually the tax payable by the assessee, after deducting the tax payments at source, came to Rs. 1,34,068. The ITO initiated proceedings under s. 273(a) of the I.T. Act, 1961, and imposed a penalty of Rs. 22,500. The AAC gave some reduction in the quantum of penalty in view of the relief obtained by the assessee in the appeal against the assessment. Not satisfied with this, the assessee appealed further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the previous year in the case of all income except income chargeable under head " Capital gains" and casual income in the nature of lottery winnings, etc. This tax payment during the previous year itself is regulated by two sets of provisions one relating to the deduction of tax at source which is covered by Ch. XVII-B (ss. 199 to 206A) and the other relating to advance payment of tax dealt with by Ch. XVII-C (covered by ss. 207 to 219). So far as tax deduction at source is concerned, the proper tax is deducted when the amounts in question are paid by the person responsible in that regard to the assessee. But so far as advance tax is concerned, it is the duty of the assessee to make an estimate of the tax that will be due from it or him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined on the basis of the regular assessment (reduced by the amount of tax deductible in accordance with the provisions of sections 192 to 194, section 194A and section 195) so far as such tax relates to income subject to advance tax and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of nine per cent. per annum from the 1st day of April next following the said financial year up to the date of the said regular assessment shall be payable by the assessee upon the amount by which the advance tax so paid falls Short of the said seventy-five per cent. " " s. 273. If the Income-tax Officer ... is satisfied that any as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to us that this is really the preferable view. For one thing, the presence of a comma towards the end of the relevant portion of s. 273(a) lends support to the contention put forward by the assessee. The presence of this punctuation mark favours the interpretation that the tax deductible at source has to be reduced or subtracted this being the modification provided for in s. 215- from 75% of the tax determined on regular assessment. But even assuming, as Mr. Wadhera contends, that too much significance should not be attached to this punctuation mark, we are of opinion that, logically also, there is no reason to prefer the view-point of the Department. As we have already explained, the broad purpose of the section is that the assessee sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Legislature intended to make and has made, the latter, the standard on the basis of which the shortfall is to be determined. There is no reason why the assessee should be given the benefit of only 75% of the tax already deducted or deductible at source. In our opinion, therefore, the Tribunal came to the correct conclusion in thinking that the assessee should be asked to pay a penalty of 10% of the amount by which there was a shortfall of the tax paid by it in relation to the amount as explained above, namely, the amount arrived at by deducting the tax deductible at source from 75% of the tax determined on the basis of the regular assessment. We would only like to add that, even assuming that there is a possibility of some doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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