TMI Blog2006 (6) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the date of filing the return of income i.e., 23-11-2000." 2. The assessee is an individual. He filed his return of income on 23-11-2000 returning his total income at Rs. 41,10,850 comprising of salary, long-term capital gains, short-term capital gains and income from other sources. He paid taxes before filing the return of income as under: (i) Tax deducted at source Rs. 44,073 (ii) Tax paid on 30-6-2000 Rs. 8,30,000* (iii) Self assessment tax paid on 31-10-2000 Rs. 50,000 (* Subject matter of dispute whether the impugned payment is in the nature of advance tax). 3. The return filed by the assessee was accepted under section 143(1)(a) of the Income-tax Act. Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Hon'ble Delhi High Court in Dr. Prannoy Roy v. CIT [2005] 254 ITR 755. The case of the Department, on the other hand, was that the aforesaid payment was not "advance tax" for the purpose of section 234A and hence it was not liable to be considered for calculation of interest. The learned CIT(A), however, decided the issue against the assessee with the following observations: "I have gone through the facts of the case and the submission made on behalf of the appellant. I have also gone through the case decision relied upon by the appellant's AR. No doubt, the decision of Delhi High Court in the case of Dr. Prannoy Roy v. CIT 254 ITR 755 is on charging of interest under section 234A, but it is an established position of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g liability of the appellant under section 234A. Looking into clear cut legislative provisions, action of Assessing Officer is justified in charging interest under section 234A amounting to Rs. 64,207 by not considering payment of Rs. 8,30,000 as self-assessment tax on 30-6-2000 instead of Rs. 708 as calculated by the appellant by taking credit of payment of self-assessment tax at Rs. 8,30,000 on 30-6-2000. Thus, appeal fails on this ground." 5. We have heard both the parties and considered their submissions. Section 234A of the Income-tax Act mandates the Assessing Officer to charge interest under section 234A "on the amount of the tax on the total income as determined under sub-section (1) of section 143 or on regular assessment as redu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be treated as "advance tax" for the financial year ending on that date as per the statutory definition of "advance tax" under section 2(1) of the Income-tax Act. 7. It, however, deserves to be noted that the definition of "advance tax" under section 2(1) is subject to the context. Opening words of section 2 are: "In this Act, unless the context otherwise requires,- (1) 'advance tax' means the advance tax payable in accordance with the provisions of Chapter XVII-C". The aforesaid phrase "unless the context otherwise requires" in section 2 is quite significant. It is a legislative acknowledgement of the fact that the phrase 'advance tax' and also other phrases defined in section 2(1) are capable of more than one meaning and can have, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on". In common parlance, the term "advance tax" would refer to the taxes paid by the assessee in anticipation of his tax liability for the concerned assessment year. In its generic sense, it is a payment in advance of the anticipated tax liability. However, the aforesaid generic meaning of the term "advance tax" stands modified by giving a statutory meaning to it, which, as stated above, can be suitably changed if the context so requires. Limited issue, therefore, is whether the context of section 234A(1) requires us to construe the term "advance tax" in its generic sense or in the sense in which it has been statutorily defined under section 2(1). 9. In law, interest is a consideration paid either for use of money or for forbearance in de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax at source under Chapter XVII-B of the Income-tax Act; and by way of payment of tax after the expiry of the concerned financial year but before the submission of the return of income. All of them have one common feature in that they all are payments, in advance, of anticipated tax liability on the returned income. The underlying object of section 234A is to compensate the State Exchequer for the delay in payment of self-assessment tax due to belated submission of the return. It is relevant to mention here that penalty is separately provided for in section 271F for failure to furnish the return of income. Thus, section 234A is not intended to be a penal measure for delay in the submission of the return of income. In other words, it is th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
