JUDGMENT
Prabir Kumar Majumdar, J.
1. This writ application relates to the assessment of the petitioner under the provisions of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), for the assessment year 1974-75, the relevant previous year being the year ended March 31, 1974.
2. On February 5, 1974, the Income-tax Officer issued a notice under Section 209 of the Act requiring the petitioner to pay advance tax amounting to Rs. 3,36,090 on the basis of the petitioner’s total income of Rs. 8,29,317 for the assessment year 1973-74. The petitioner duly paid the said sum demanded by the said notice. The petitioner, however, considered that the advance tax payable by it for the said period, i.e., 1974-75, was likely to be much more than the advance tax demanded by the Income-tax Officer by the said notice dated February 5, 1974. On February 21, 1974, the petitioner made an application before the Commissioner of Income-tax, West Bengal-1, Calcutta, inter alia, stating that the petitioner expected that the advance tax payable by it was likely to exceed the advance tax demanded and the Commissioner was requested to extend the time to file the estimate by 30 days immediately following the last date of the previous year, i.e., up to April 30, 1974, in terms of the proviso to Section 212(3A) of the Act. The petitioner asked for such extension of time as, according to the petitioner, having regard to the nature of the business carried on by the petitioner, it was difficult for the petitioner to furnish the estimate required to be furnished in accordance with the provisions of the Act on or before the date on which the last instalment of advance tax was due. By an order dated March 15, 1974, the Commissioner extended the time as prayed for and it was further directed by the said order that the petitioner would pay Rs. 7,00,000 more towards advance tax by March 25, 1974. The petitioner duly paid the said sum of Rs. 7,00,000 on or about April 26, 1974; the petitioner filed an estimate for the assessment year, i.e., 1974-75, and the estimate of the petitioner was for the sum of Rs. 17,11,410 and the petitioner paid the said sum by cheque on April 30, 1974.
3. The assessment of the petitioner was completed under Section 143(3) of the Act and the concerned Income-tax Officer allowed credit for the advance tax paid by the petitioner amounting to Rs. 27,47,500 (i.e., Rs. 3,36,090 + Rs. 7,00,000 + Rs. 17,11,410). By the said assessment order, the Income-tax Officer also directed for charging of interest under Section 215 on the basis of the total income as computed by the Income-tax Officer. The petitioner preferred an appeal from the said assessment order. The said appeal was disposed of by an order of the Appellate Assistant Commissioner dated November 8, 1977. It was, inter alia, contended by the petitioner/appellant before the appellate authority that the Income-tax Officer erred in charging interest under Section 215 of the Act. The Appellate Assistant Commissioner, by his said order, disposed of the appeal, inter alia, by holding that the order levying interest was not appealable and as such the said objection by the petitioner/appellant regarding the Income-tax Officer’s power in charging interest under Section 215 in the facts and circumstances of the case could not be entertained.
4. The petitioner preferred an appeal from the said order of the Appellate Assistant Commissioner dated November 8, 1977, before the Income-tax Appellate Tribunal. In disposing of the said appeal, the Income-tax Appellate Tribunal, by its order dated September 6, 1978, inter alia, held that the Appellate Assistant Commissioner should have entertained and decided the ground relating to interest under Section 215 of the Act and that the order of the Appellate Assistant Commissioner on the said issue was set aside and the matter was remanded to him for fresh decision in accordance with the law on the question relating to charging of interest under Section 215 of the Act.
5. By an order dated September 13, 1979, the Commissioner of Income-tax (Appeals) on remand, inter alia, held that there was no justification for charging of interest under Section 215 of the Act in the facts and circumstances of this case.
6. The Revenue preferred an appeal before the Income-tax Appellate Tribunal against the said order dated September 13, 1979. By order dated April 30, 1981, the Income-tax Appellate Tribunal, inter alia, held that the Commissioner of Income-tax (Appeals) in making the said order under appeal relied on the instruction of the Board and concluded that interest under Section 215 of the Act was attributable to the addition on account of provision towards gratuity and had to be waived but he had not applied his mind to the remaining portion of the interest, that is, interest not attributable towards gratuity. The Tribunal, therefore, concluded that the appellate authority could not give a decision that interest under Section 215 of the Act could not be charged at all.
7. By the order dated February 2, 1982, which is the order impugned in these proceedings, the Income-tax Officer passed an order giving effect to the said order dated April 30, 1981, passed by the Income-tax Appellate Tribunal and the concerned Income-tax Officer charged interest under Section 215 of the Act in respect of a sum of Rs. 17,11,410 as, according to him, it was not payment of advance tax within the financial year as stipulated in Section 215 of the Act.
8. As stated hereinabove, the petitioner made an application under Section 264 of the Act before the Commissioner, inter alia, praying that the Income-tax Officer should be directed not to charge interest on the said sum of Rs. 17,11,410. But, by another impugned order dated September 5, 1986, the Commissioner rejected such application of the petitioner made under Section 264 of the Act.
9. The case of the Revenue as revealed in their affidavit in opposition affirmed by one Amiya Ranjan Mondal, Commissioner of Income-tax, Central-1, Calcutta, on June 29, 1987, is mainly that, in order to avoid chargeability of interest under Section 215 of the Act, the law requires that the assessee must pay the advance tax within the financial year and, according to the Revenue, such estimated sum of Rs. 17,11,410 was not paid by the petitioner being the assessee within the financial year. According to the Revenue, the financial year in Section 215 of the Act refers to the relevant financial year in respect of which advance tax was paid and since the said sum of Rs. 17,11,410 was not paid by the petitioner before the close of the financial year, the petitioner was liable to pay interest under the provisions of Section 215 of the Act. It was also the case of the respondent that the payment of advance tax within the extended period as claimed by the petitioner should not be considered as advance tax paid under the provisions of the Act. According to the respondent, the assessee was liable to make payment of the advance tax within the “financial year”.
10. Mr. R.N. Bajoria, learned counsel appearing with Mr. S.K. Bagaria, has argued that in terms of the provisions contained in Section 212, Sub-section (3A), read with the proviso, the Commissioner, in certain circumstances, has power to extend the date for furnishing the estimate of advance tax by the assessee only up to a period of 30 days immediately following the last date of the previous year in respect of the business of the assessee, and where the date is so extended the assessee shall pay on or before the date so extended the amount by which the amount of advance tax already paid by him falls short of the advance tax payable in accordance with the assessee’s estimate. Mr. Bajoria has argued that there is no dispute here that the petitioner has furnished the revised estimate and paid the sum as estimated within the time extended by the Commissioner in terms of the proviso to Sub-section (3A) of Section 212 of the Act and the amount of advance tax so paid within the time as extended by the Commissioner should be treated as payment of advance tax within the “financial year” as stipulated under the Act. It has been argued by Mr. Bajoria that Chapter XVII of the Act deals with collection and recovery of tax and Sections 207 to 219 in the said Chapter deal with the payment of advance tax. Mr. Bajoria argues that in terms of Section 207, the tax shall be payable in advance during any “financial year” in accordance with the provisions of Sections 208 to 219 (both inclusive) in respect of the total income of the assessee which would be chargeable to tax for the assessment year immediately following the financial year. It is submitted by Mr, Bajoria that Section 212 including its sub-sections particulary (3A) read with the proviso is one of the sections between Sections 208 and 219.
11. Mr. Bajoria has also referred to Section 211 of the Act, which, inter alia, provides for due dates in three equal instalments, namely, September 15, December 15 and March 15, by which instalments the assesseq who is liable to pay should pay the advance tax during the relevant financial year.
12. It is the argument of Mr. Bajoria that under Section 207 of the Act, the tax shall be payable in advance during any financial year in accordance with the provisions of Sections 208 to 219 which includes Section 212 as also the Section 209A.
13. It is submitted by Mr. Bajoria that it is provided in Section 215 that where, in any financial year, an assessee has paid advance tax under Section 209A or Section 212 on the basis of his own estimate, the expression “financial year” in Section 215 should mean and include the period as extended in terms of the proviso to Sub-section (3A) of Section 212. It is also his submission that if the expression “financial year” as sought to be interpreted by the Revenue is accepted, the provisions contained in the proviso to Sub-section (3A) of Section 212 or the proviso to Sub-section (4) of Section 209A would be meaningless and infructuous. If the assessee is called upon to pay interest under the provisions of Section 215 on advance tax already paid within the time as extended in terms of the proviso to Sub-section (3A) of Section 212 but not strictly paid within the “financial year” then, there would be no necessity at all for any assessee to pray for extension of time and also there is no necessity for any power being vested in the Commissioner for allowing such extension up to the period as stipulated in the proviso to Sub-section (3A) of Section 212 of the Act or the dates stipulated in the proviso to Sub-section (4) of Section 209A of the Act.
14. According to Mr. Bajoria, the Legislature had contemplated while using the expression “financial year” that the financial year should also include the extended time as permissible under the respective provisos to Sub-section (3A) of Section 212 and Sub-section (4) of Section 209A. Finally, it is submitted by Mr. Bajoria that if such restricted meaning as sought to be given by the respondent to the expression “financial year” in Section 215 of the Act is accepted then the provisions contained in the proviso to Sub-section (3A) of Section 212 and the proviso to Sub-section (4) of Section 209A of the Act would became meaningless and nugatory. It has also been argued by Mr. Bajoria that such benefit has been conferred on the assessee by the provision contained in the said two provisos as referred to above in order to overcome the rigorous consequences of non-payment of advance tax.
15. Mr. Bajoria has also referred to the objects and reasons for the introduction of the said proviso to Sub-section (3A) of Section 212 of the Act.
16. Mr. Bajoria has also relied on the decision of the Rajasthan High Court in CIT v. Jaipur Udyog Ltd. [1987] 167 ITR 306 and the decision of the Kerala High Court in CIT v. Nenmony Investments and Agencies Ltd, [1978] 113 ITR 354 in support of his contention that the amount paid beyond the financial year but within the time allowed would be treated as payment of advance tax and due credit should be given for such payment of advance tax within the time allowed under the Act but beyond the financial year.
17. Mr. Bajoria has also submitted as would appear from the assessment order that the income-tax authority has given due credit for the advance tax so paid by the petitioner within the time as extended by the Commissioner under the terms of the proviso to Sub-section (3A) of Section 212 but has levied interest on the sum estimated by the petitioner on the ground that the advance tax has not been paid within the financial year as stipulated in Section 215 of the Act.
18. Mr. Mihir Bhattacharyya, learned counsel for the Revenue, has argued that if the expression “financial year” in Section 215 was intended to include the extended time as stipulated in the proviso to Sub-section (3A) of Section 212, then the Legislature would have incorporated such an explanation in the very section itself, i.e., Section 215 of the Act. It has further been argued that if it was the intention of the Legislature to take into account the extended time as stipulated in the proviso to Sub-section (3A) of Section 212 of the Act, then the Legislature would have provided in Section 215 by saying where in any financial year or within such extended period as allowed by the Commissioner under the proviso to Sub-section (3A) of Section 212 of the Act.
19. According to Mr. Bhattacharyya, the Legislature has deliberately refrained from introducing such expression in Section 215 of the Act. Mr. Bhattacharyya has also argued that chargeability of interest under Section 215 of the Act does not necessarily mean that it is a penal measure. He also submits that the assessee is required to submit his estimate within the time stipulated in the Act, but for some reasons to be stated by the assessee, the assessee can pray for extension of time to file his estimate and such extension being granted the assessee can file his estimate within such extended time. Mr. Bhattacharyya submits that under the provisions of the Income-tax Act, 1961, the Revenue authority may charge interest for non-filing of the estimate within the time as stipulated in the Act although the tax is paid within the time as extended under the provisions of the Act. It is, however, submitted by Mr. Bhattacharyya that it is true that in a given case the authority concerned has got power under the Act to waive or condone levying such interest. In the present case with regard to the payment of advance tax, Mr. Bhattacharyya submits that under Section 273A notwithstanding anything contained in the Act, the Chief Commissioner or the Commissioner may, in his discretion, reduce or waive the amount of interest paid or payable under Sub-section (8) of Section 139 or Section 215 or Section 217 or the penalty imposed or imposable under Section 273. Accordingto Mr. Bhattacharyya, it is open to the assessee to pray for such waiver or reduction of payment of interest under Section 215 of the Act, but the petitioner should not be allowed to contend that the expression “financial year” in Section 215 of the Act should include the extended time as stipulated in the proviso to Sub-section (3A) of Section 212 of the Act.
20. In this application, the short point that has to be decided is, if any assessee has paid the advance tax as estimated by the assessee within the period stipulated in the proviso to Sub-section (3A) of Section 212 of the Act, then whether the assessee is liable to pay interest levied under Section 215 of the Act.
21. It would appear that under Section 207, it is provided that the tax shall be payable in advance during any financial year in accordance with the provisions of Sections 208 to 219 (both inclusive). Under Section 208 of the Act, the assessee is obliged to pay advance tax during the financial year. Section 209 of the Act provides for computation of advance tax and Section 209A of the Act provides for computation and payment of advance tax by the assessee, Section 211 of the Act allows an assessee to pay advance tax by instalments on or before the due dates specified in Section 211 of the Act.
22. Section 212 of the Act allows the assessee to make an estimate and furnish such estimate to the tax authorities. Much reliance has been placed by the petitioner on Sub-section (3A) read with the proviso thereto of Section 212 of the Act. It is provided under Sub-section (3A) that in the caseof any assessee who is required to pay advance tax by an order under Section 210, if, by reason of the current income being likely to be greater than the income on which the advance tax payable by him under Section 210 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 demanded from the assessee under Section 210 by more than 33i/3 per cent. of the latter amount, the assessee shall, on or before the date on which the last instalment of advance tax is due from him, send to the Income-tax Officer an estimate of (i) the current income, and (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 (2). Therefore, in accordance with this provision, if it is found by an assessee that the current income which shall be estimated by the assessee exceeds the amount of advance tax demanded from him under Section 210 by more than 33 1/3 per cent. of the latter amount the assessee shall be obliged to furnish the estimate and pay the advance tax accordingly. Such estimate would have to be furnished and the payment in accordance therewith shall be made on such of the dates applicable in the case of the assessee under Section 211 of the Act.
23. In terms of the proviso to Sub-section (3A) of Section 212 of the Act, if 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 sub-section, i.e. (Sub-section (3A)), on or before the date on which the last instalment of advance tax was due in his case, he may, if the assessee pays the advance tax demanded from him under Section 210 before such date, extend the date for furnishing such estimate up to a period of 30 days immediately following the last date of the 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 amount of advance tax already paid by him falls short of the advance tax payable in accordance with his estimate. Therefore, in terms of the proviso, the Commissioner in certain circumstances has power to extend the time for furnishing the estimate of advance tax and payment thereof, but such extension should not be more than 30 days immediately following the last date of the previous year in respect of the assessee’s business.
24. It is not in dispute that in the present case, the assessee has paid Rs. 3,36,090 as demanded under Section 210 of the Act. It is also not in dispute that the petitioner has furnished the estimate of advance tax within the time as extended by the Commissioner in terms of the proviso to Sub-section (3A) of Section 212 of the Act and also paid the advance tax in accordance with such estimate within the said period.
25. It is also not in dispute that the respondent has given due credit for the advance tax paid by the petitioner.
26. Now, the question here is whether, in such facts and circumstances, the petitioner is obliged to pay interest as sought to be levied by the respondent under Section 215 of the Act or in other words upon payment of advance tax pursuant to the estimate furnished by the petitioner within the time as extended in terms of the proviso to Sub-section (3A) of Section 212 of the Act. The revenue authorities are empowered to levy interest under Section 215 of the Act.
27. It would appear from the provisions of the Act as referred to above that an assessee is obliged to pay advance tax on the current income during any financial year in accordance with the provisions of Sections 208 to 219 (both inclusive). It would also appear from Section 211 that the due dates of the instalments in a financial year have been specified. Therefore, from a reading of the relevant provisions relating to the payment of advance tax including Section 212, Sub-section (3A), read with the proviso thereto, that for the purpose of payment of interest under Section 215 of the Act, the expression “financial year” in Section 215 should include the extended time as stipulated in the proviso to Sub-section (3A) of Section 212 of the Act. If the construction is given to the expression “financial year” under Section 215 of the Act to mean that it is the financial year as stipulated under the Act read with the dates of instalments as specified in Section 211 of the Act then, in my view, the expression “in accordance with the provisions of Sections 208 to 219 (both inclusive)” in Section 207 would have a restricted meaning. The expression “an assessee had paid advance tax under Section 209A or Section 212 on the basis of his own estimate (including the revised estimate)” cannot be given a proper meaning while construing the expression “financial year” in Section 215 of the Act. There is no doubt that the assessee has been conferred a benefit under the proviso to Sub-section (3A) of Section 212 of the Act to ask for extension of time and the Act also empowers the Commissioner having regard to the facts and circumstances of the case to extend such time, but only up to a period of 30 days immediately following the last date of the previous year in respect of the assessee’s business. If as in the present case, the petitioner is called upon to pay interest in terms of the provisions of Section 215 of the Act, on the ground that the advance tax has not been paid within the financial year then this provision as to the extension of time Up to a period of 30 days immediately following the last date of the previous year in the proviso to Sub-section (3A) of Section 212 of the Act would be meaningless. Further, if it is contended that if the advance tax paid within such time as extended in terms of the proviso to Sub-section (3A) of Section 212 of the Act would be treated as payment of advance tax and due credit be given therefor, but for the purpose of Section 215 the authority concerned would have power to levy interest for not paying the advance tax within the financial year then the benefit given by the proviso to Sub-section (3A) of Section 212 would be meaningless and an empty benefit.
28. I find it difficult to persuade myself to accept such construction of Section 215 as is sought to be given by the Revenue that the Revenue would be empowered to levy interest under Section 215 of the Act if the estimated advance tax is not paid within the financial year but is paid within the extended time within the meaning of the proviso to Sub-section (3A) of Section 212 of the Act.
29. In my opinion, if such construction is given to the expression “financial year” then the provision giving benefit to an assessee to furnish the estimate of advance tax and making payment of the advance tax in accordance with the estimate within the extended time as stipulated in the proviso to Sub-section (3A) of Section 212 of the Act would have no force and would be of no avail. I think that is not the intention of the Legislature while incorporating such a provision as to extension of time up to a certain period of time as stipulated under the proviso to Sub-section (3A) of Section 212 of the Act or in the proviso to Sub-section (4) of Section 209A of the Act.
30. I am also of the view that Section 215 should be read taking into account the said proviso to Sub-section (3A) of Section 212 while construing the expression “financial year” in Section 215 of the Act.
31. I, therefore, hold that under the provisions of the said Section 215 of the Act no interest can be charged in respect of the advance tax paid within the time stipulated in the proviso to Sub-section (3A) of Section 212 of the Act and by the impugned order dated February 2, 1982, the Income-tax Officer was wrong in levying interest under Section 215 of the Act in respect of the sum of Rs. 17,11,410 being the estimate of advance tax by the petitioner.
32. I also hold that the order dated September 5, 1986, passed by the Commissioner under Section 264 of the Act rejecting the application of the petitioner for direction that the Income-tax Officer may be directed not to charge interest in the said sum of Rs. 17,11,410 paid as advance tax within the time as allowed or stipulated in the proviso to Sub-section (3A) of Section 212 of the Act is not justified.
33. This writ application succeeds. The rule is made absolute. A writ in the nature of mandamus do issue commanding the respondents to withdraw, cancel or rescind the said order dated February 2, 1982, being Memo No. PAN-11-000-C7-1612/GAL C. C. (26) assessment year 1974-75 dated February 2, 1982, and also the REV-83/81-82/902, dated September 5, 1986, so far as the same relates to charging of interest on the sum of Rs. 17,11,410. In the facts and circumstances of the case, there will be no order as to costs