JUDGMENT R.K. Agrawal, J.
1. The Income-tax Appellate Tribunal, Delhi, has referred the following questions of law under Sections 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for opinion to this Court (The question referred was as follows : "Whether the finding of the Income-tax Appellate Tribunal that the amount of Rs. 75,000 seized during the previous year in question could not be regarded as advance tax, and the same was also not liable to be reduced while computing interest under Sections 139(8) and 217 of the Act, is wholly incorrect and is based on improper interpretation of the provisions of law relating to payment of advance tax, etc. ?"--Ed.):
2. The reference relates to the assessment year 1977-78.
Briefly stated, the facts giving rise to the present petition are as follows :
The applicant is a Hindu undivided family. Its accounting year for the assessment year was ending on Diwali, 1976. A search within the meaning of Section 132 of the Act was conducted on 25th and 27th of January, 1977, in the business premises of the applicant when the amount of Rs. 75,000 in cash apart from other items were seized from the residential premises. The assessment was framed on a total income of Rs. 1,89,400 on July 14, 1982. In the said order, there was no direction by the Assessing Officer about the charging of interest under Sections 139(8) or 217 of the Act. The applicant feeling aggrieved preferred appeal before the Commissioner of Income-tax (Appeals) on various grounds. The Commissioner of Income-tax (Appeals) had partly allowed the appeals. While giving effect to the appellate order, the Assessing Officer redetermined the total income at Rs. 1,77,420 on which he worked out the tax at Rs. 1,00,509, which demand was subsequently reduced by advance tax aggregating to Rs. 92,000. The net tax payable was worked out at Rs. 8,509. While passing the order giving effect to the appellate order, the Assessing Officer also charged interest under Sections 139(8) and 217 of the Act. While doing so, he treated the amount of Rs. 75,000 seized at the time of search as having been paid towards advance tax. Subsequently, he detected the mistake and initiated the rectification proceedings under Sections 154 of the Act in respect of the interest charged under Sections 217 of the Act as, according to him, the advance tax payment was wrongly taken at Rs. 92,000 as cash amount of Rs. 75,000 seized at the time of the search cannot be considered as advance tax payment. He after giving an opportunity of hearing to the applicant, redetermined the amount of interest payable under Sections 139(8) and 217 of the Act. Feeling aggrieved, the applicant preferred an appeal before the Commissioner of Income-tax (Appeals) who, vide order dated November 25, 1985, had affirmed the order passed under Sections 154 of the Act. The applicant's further appeal before the Tribunal, did not meet with any success.
3. We have heard Sri Vikram Gulati, learned Counsel for the applicant, and Sri Shambhoo Chopra, learned standing counsel appearing for the Revenue.
4. Learned Counsel for the applicant submitted that as the amount of Rs. 75,000 was seized by the Department on 25th and 27th January, 1977, the said amount was available with the Department and ought to have been treated as advance tax. The assessing authority had rightly treated the same as advance tax while computing the interest payable under Sections 139(8) and 217 of the Act. The rectification order was, therefore, wholly without jurisdiction.
5. It may be mentioned here that the amount of Rs. 75,000 had been adjusted on April 29, 1983, towards the regular tax. We have given our anxious consideration to the submissions made by learned Counsel for the applicant and we find that we are unable to accept the same. It is not in dispute that the previous year relevant to the assessment year in question ended on Diwali, 1976. The search and seizure was made on 25th to 27th January, 1977, which fell in the subsequent previous year which is relevant to the assessment year 1978-79.
6. Section 211(1)(i) of the Act reads as under :
211. Instalments of advance tax.--Subject to the provisions of this section and of Sections 209A and 212, advance tax shall be payable in three equal instalments on the following dates during the financial year, namely :--
(i) the 15th day of June, the 15th day of September and the 15th day of December, in the case of an assessee whose total income to the extent of 75 per cent, thereof or more is derived from a source or sources for which the previous year (relevant to the assessment year next following the financial year aforesaid) ends on or before the 31st day of December.
7. Under Clause (i) of Sub-section (1) of Section 211 of the Act the instalments of advance tax are payable on the 15th day of June, 15th day of September and 15th day of December in the case of an assessee whose total income to the extent of 75 per cent, thereof or more is derived from a source or sources for which the previous year (relevant to the assessment year next following the financial year aforesaid) ends on or before the 31st day of December. In the present case, as the previous year of the applicant ended on Diwali, 1976, which is much before the 31st December, the instalment of advance tax was payable on 15th June, 15th September and 15th December of the relevant previous year. Thus, any amount which has been seized after the close of the financial year cannot be, by any stretch of imagination, treated as payment towards advance tax even if it has been adjusted by the Department towards the tax liability. Thus, the order passed by the assessing authority under Sections 154 was justified.
8. We, therefore, answer the question referred in the affirmative, i.e., in favour of the Revenue and against the assessee. There shall be no order as to costs.