JUDGMENT
G.L. Oza, Actg. C.J.
1. This reference is made by the Income-tax Appellate Tribunal for answering the following questions :
“(1) Whether, on the facts and in the circumstances of the case, the failure on the part of the assessee to file the estimate attracted penalty under Section 273(b) of the Income-tax Act ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in setting aside the order of the Appellate Assistant Commissioner and restoring the order of the Income-tax Officer? ”
2. The year of assessment is 1972-73, previous year ending in October, 1971. It is alleged that the assessee committed default in not filing the estimates and, therefore, he was served with a notice under Section 274 read with Section 273(b) of the Income-tax Act, 1961. In compliance with the notice, the assessee filed a reply stating that though the estimates were not filed, advance tax of Rs. 50,000 was paid by the assessee in time and since the assessee admitted the default of non-filing of the estimates, the Income-tax Officer levied a penalty of Rs. 5,325 under Section 273(b) of the Act against which the assessee went up in appeal before the Appellate Assistant Commissioner.
3. The Appellate Assistant Commissioner considered the assessee’s submissions that the assessee had made an advance tax payment of Rs. 50.000 on December 14, 1971. It was also admitted before the Appellate Assistant Commissioner that it was not full payment but it was contended that the Income-tax Officer had not given credit for the payment of advance tax and that merely non-filing of an estimate was not enough to attract the penalty provisions. The Appellate Assistant Commissioner after considering the submissions made by the assessee held that the Income-tax Officer should have considered the payment of Rs. 50,000 as advance tax and should have considered the question of levy of penalty in that light.
4. On an appeal by the Revenue before the Tribunal, the Tribunal by its order dated September 5, 1979, rejected the assessee’s contention that non-filing of the estimates was a mere technical default as the assessee was ignorant of the provisions of law arid following the decision of the Madras High Court in CIT v. Smt. Vijayanthimala [1977] 108 ITR 882 (Mad), the Tribunal set aside the order of the Appellate Assistant Commissioner and restored the order passed by the Income-tax Officer. Arising out of this order passed by the Tribunal on an application made by the assessee, the Tribunal has made this reference to answer the question quoted above.
5. Learned counsel appearing for the assessee contended that penalty is provided in Section 273(b) but this provision talks of failure to furnish an estimate of the advance fax without reasonable cause in accordance with Section 212(3) and it is contended that Section 212(3) provides that when a person is not previously assessed, he shall furnish an estimate of the advance tax payable by him on the current income calculated in the manner laid down in Section 209. It was, therefore, contended that penalty under Section 273(b) is attracted when there is non-compliance with Sub-section (3) of Section 212 and Sub-section (3) contemplates the estimates of income and advance tax. Admittedly, part of Sub-section (3) of Section 212 was complied with as advance tax was paid by the assessee and it was contended that for failure on the part of the assessee to submit an estimate the assessee has shown reasonable cause and under these circumstances merely for technical non-compliance with part of Section 212(3), penalty could not be imposed. Learned counsel contended that the judgment in CIT v. Vijayanthimala [1977] 108 ITR 882 (Mad), on which reliance was placed by the Tribunal, was a case of default of payment of advance tax and, therefore, could not have been used for imposing penalty only on the ground that an estimate of income was not filed. Learned counsel also placed reliance on a decision of the Punjab & Haryana High Court in Addl. CIT v. Bipan Lal Kuthiala [1975] 98 ITR 343 to contend that under the penal provisions under Section 273, the burden lay on the Department. Learned counsel for the assessee alternatively also contended that even if the first question is answered against the assessee that the penalty provisions under Section 273(b) of the Income-tax Act are attracted, still the second question referred deserves to be considered in favour of the assessee as the Appellate Assistant Commissioner, although holding that the penalty provisions are attracted, set aside the order of the Income-tax Officer and directed that the question about depositing of advance tax of Rs. 50,000 should have been considered by the Income-tax Officer while imposing penalty under Section 273(b).
6. Learned counsel for the Revenue placing reliance on the decision of the Punjab & Haryana High Court in Abhilash Kitmar Oswal v. CIT [1982] 138 ITR 277, contended that the levy of penalty was justified as admittedly there was default in filing the estimates.
7. Section 273(b) provides:
“273. If the Income-tax Officer, in the course of any proceedings in connection with the regular assessment for the assessment year commencing on 1st day of April, 1970, or any subsequent assessment year, is satisfied that any assessee–…
(b) has without reasonable cause failed to furnish an estimate of the advance tax payable by him in accordance with the provisions of Sub-section (3) of Section 212.”
8. The section thus clearly provides that where an assessee fails to furnish an estimate of the advance tax payable by him without any reasonable cause in accordance with the provisions of Sub-section (3) of Section 212, penalty could be imposed. As regards the reasonable cause, it could not be disputed that that is a question of fact and the Tribunal having held against the assessee, it could not be reagitated in this reference. Learned counsel placed reliance on the language of Section 212 to contend that penalty is attracted under Section 273 not merely because the estimates are not filed but also because the advance tax is not paid, but, in this case, the, advance tax to the tune of Rs. 50,000 was deposited by the assessee in time. Sub-section (3) of Section 212 on which reliance has been placed and which is also referred to in Clause (b) of Section 273, reads as follows :
” 212. (3) Any person who has not previously been assessed by way of regular assessment under this Act or under the Indian Income-tax Act, 1922 (11 of 1922), shall, in each financial year, 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 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).”
9. This contemplates that the assessee should file estimate of current income and advance tax payable by him. It is, therefore, clear that penalty has been provided under Clause (b) of Section 273 for non-compliance of Sub-section (3) of Section 212 which contemplates two things–filing of estimates and payment of advance tax. The main contention advanced by the learned counsel for the assessee is that non-filing of estimates is a mere technical default, that substantial compliance was there as the advance tax was paid, but it could not be disputed that even if advance tax was paid, there was a default within the language of Section 212(3) as the estimate of current income was not submitted in time and, therefore, it could not be contended that the Income-tax Officer has no jurisdiction under Section 273(b) to impose penalty for non-filing of an estimate.
10. It appears that the main contention of the learned counsel was that as advance tax was paid but estimate was not filed as the assessee pleaded ignorance, this was sufficient reason in the circumstances of the case and, therefore, penalty should not have been imposed under Section 273(b). Whether, in the facts of a particular case, the cause shown by the assessee on facts could or could not be treated as a reasonable cause is a question of fact which has been disposed of and is not before us. The first question referred is as to whether the failure on the part of the assessee to file the estimate attracted the provisions of Section 273(b) of the Income-tax Act, and as it is clear from the language of Section 273(b) read with Section 212(3), it could not be doubted that Section 273(b) is attracted on failure to file an estimate. The decisions cited by learned counsel for both the parties do not carry the case any further. Admittedly, there was default in filing the estimates. In view of this, in our opinion, the first question has to be answered in favour of the Revenue that on the facts and circumstances of the case, failure on the part of the assessee to file the estimate attracted the penalty provisions under Section 273(b) of the Income-tax Act.
11. The second question which is referred to us is about the order passed by the Appellate Assistant Commissioner and the order of the Tribunal setting aside this order. The Appellate Assistant Commissioner in his order felt that the penalty provision under Section 273(b) no doubt is attracted but as the penalty could be imposed for both the things, failure to file estimate, failure to de posit advance tax and, therefore, it was necessary for the Income-tax Officer to consider the question of imposition of penalty after considering the advance tax deposited by the assessee. This order was set aside by the Tribunal mainly on the ground that Section 273(b) is attracted but it could not be disputed that the Income-tax Officer while imposing penalty had not considered the deposit of the advance tax to the tune of Rs. 50,000 as admittedly Section 212(3) contemplates two things–filing of estimate and depositing the advance tax and for this non-compliance, penalty is attracted under Section 273(b) and, therefore, the Income-tax Officer while imposing penalty ought to have considered that out of the two things necessary under Section 212(3), the assessee had complied with one part, i.e., he had deposited advance tax to the tune of Rs. 50,000, and it was in this light that the Appellate Assistant Commissioner directed the Income-tax Officer to consider the case of penalty after considering the deposit by the assessee of advance tax in time, and so, in our opinion, there was no justification for the Tribunal to set aside this order of the Appellate Assistant Commissioner. In this view of the matter, therefore, our answer to the second question is in favour of the assessee saying that, on the facts and circumstances of the case, the Tribunal was not justified in setting aside the order of the Appellate Assistant Commissioner and restoring the order of the Income-tax Officer.
12. The reference is answered accordingly. In the circumstances, parties are directed to bear their own costs.
