Advance Tax Estimate furnished by assessee u/s. 210(5) cannot be rejected by department

HIGH COURT OF PUNJAB AND HARYANA

Punjab Tractors Ltd.

Versus

Assistant Commissioner of Income-tax

MARCH 16, 2004

N.K. Sud, J. –

Challenge in this petition is to the letter issued by the Assistant Commissioner of Income-tax, Patiala, dated 12-3-2004, Annexure P.2, whereby the estimate, filed by the petitioner has been rejected and it has been required to pay advance tax in accordance with the order under section 210(3) of the Income-tax Act, 1961 (for short ‘the Act’) dated 19-2-2004.

2. The petitioner had received the order dated 14-2-2004 under section 210(3) of the Act requiring it to pay advance tax for the current financial year 2003-04 on the basis of the income assessed for the assessment year 2000-01. In response to this order the petitioner furnished an estimate on Form No. 28A under section 210(5) on 26-2-2004, Annexure P.6, wherein the net taxable income for the current financial year after deductions under sections 80HHC and 80-IA was estimated at Rs. 27.26 crores. Tax on the said income was calculated at Rs. 20.54 crores. Since a sum of Rs. 15 crores had already been deposited as advance tax, balance payable by the petitioners was shown as Rs. 5.54 crores. This amount was also deposited on 12-3-2004. The Assessing Officer vide the impugned order dated 12-3-2004 Annexure P.2 has rejected this estimate on the ground that Form No. 28A could not be filed without pointing out any mistake in the order under section 210(3), dated 19-2-2004.

3. We have heard the learned counsel for the parties and have perused the relevant provisions of the Act. The Assessing Officer has not appreciated the provisions of law correctly. As per the provisions of section 210(5), if an assessee, who receives an order under sub-section (3) or (4) of section 210, feels that his current income would be less than the amount on which advance tax has been demanded vide such order, can send an intimation on Form No. 28A to the Assessing Officer and pay advance tax as per his own estimate. This right is not confined only to correction of mistakes in the orders passed under sub-section (3) or (4) of section 210. In the present case, the Assessing Officer had demanded advance tax on the basis of last regularly assessed income for the assessment year 2000-2001 as per the provisions of 210(3) of the Act. Since the assessee was of the view that in its estimate, the advance tax payable on its current income during the current financial year would be less, it exercised its right under section 210(5) by filing an estimate of income on Form No. 28A. No provision of law has been shown to us under which such an estimate can be rejected by the departmental authorities. We are, therefore, satisfied that the Assessing Officer was not justified in rejecting this estimate and requiring the assessee to pay advance tax in terms of his order under section 210(3) of the Act dated 19-2-2004. The assessee is liable to pay advance tax only on the basis of the income estimated by it in Form No. 28A filed under sub-section (5) of section 210.

4. Accordingly, the writ petition is allowed. Letter dated 12-3-2004 Annexure P.2 is quashed.