| Case ID |
41d19972-4a8e-422a-8433-11a8f7794ed4 |
| Body |
View case body. Login to View |
| Case Number |
IT REFERENCE NO. 80 OF 1988 |
| Decision Date |
Jan 16, 2007 |
| Hearing Date |
|
| Decision |
The Punjab and Haryana High Court ruled that the assessee was liable to pay interest under section 216 of the Income Tax Act, 1961 due to deliberate underestimation of advance tax. The case involved the assessment year 1982-83 where the assessee initially estimated an advance tax liability of Rs. 46,12,500 but later revised this to Rs. 68,88,000 just before the final installment due date. The Assessing Officer charged interest, which was upheld by the Commissioner (Appeals). The Tribunal's decision to not charge interest was overturned, confirming that the interest under section 216 must be calculated based on the aggregate of advance tax paid during the year, not on an installment basis. This case highlights the importance of accurate tax estimation and the consequences of underestimating tax liability. |
| Summary |
In the landmark case of Commissioner of Income-tax v. Upper India Steel Mfg. and Engg. Co. (P.) Ltd., the Punjab and Haryana High Court addressed the significant issue of advance tax underestimation under the Income Tax Act, 1961. The case, decided on January 16, 2007, centered around the assessment year 1982-83, where the assessee filed an advance tax estimate of Rs. 46,12,500. However, shortly before the due date for the final installment, the assessee revised this estimate to Rs. 68,88,000, leading to short payments in the first two installments. The Assessing Officer imposed interest under section 216 of the Income Tax Act due to this deliberate underestimation. The court emphasized the necessity for taxpayers to provide accurate estimates to avoid penalties. The ruling has implications for all taxpayers, urging them to maintain transparency and accuracy in their tax filings to prevent unnecessary financial liabilities. This case serves as a critical reminder in tax law, highlighting that underestimating tax obligations can lead to significant repercussions, including interest charges for non-compliance. By understanding the court's decision, taxpayers can better navigate their responsibilities under the law, ensuring they meet their financial obligations accurately and timely. |
| Court |
Punjab and Haryana High Court
|
| Entities Involved |
Not available
|
| Judges |
M.M. Kumar,
Rajesh Bindal
|
| Lawyers |
S.K. Mukhi,
S.K. Garg Narwana
|
| Petitioners |
Not available
|
| Respondents |
Upper India Steel Mfg. and Engg. Co. (P.) Ltd.
|
| Citations |
2007 SLD 3754,
(2007) 292 ITR 81,
[2007] 164 TAXMAN 580 (PUNJ. & HAR.)
|
| Other Citations |
Upper Doab Sugar Mills Ltd. v. CIT [2003] 263 ITR 97/ 132 Taxman 209 (All.),
CIT v. Namdang Tea Co. India Ltd.[1993] 202 ITR 414 (Gau.),
CIT v. Rayalaseema Mills Ltd. [1997] 228 ITR 477 (AP),
CIT v. Lankashi Tea & Seed Estate (P.) Ltd. [1996] 222 ITR 133/[1997] 94 Taxman 15 (Gau.)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
216
|