- (1.) THE Income-tax Tribunal, Chandigarh, in pursuance of the direction of this court under Section 256 (2) of the Income-tax Act, 1961 (hereinafter to be referred to as the " 1961 Act "), dated April 4, 1974, referred the following question for the opinion of this court : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the payment of Rs. 76,150by cheque on March 15, 1961, could not be considered as payment of advance income-tax ? "
(2.) THE assessee is a limited company. For the assessment year 1961-62, the accounting year of the company is the calendar year 1960. A notice under Section 18a (1) of the Indian Income-tax Act, 1922 (hereinafter to be referred to as the " 1922 Act "), was served on the assessee on July 18, 1960, requiring it to pay a sum of Rs. 91,150. 20 as advance tax in three equal instalments on September 15, 1960, December 15, 1960, and March 15, 1961. The instalment due on September 15, 1960, was not paid by the assessee. On September 27, 1960, it, however, filed an estimate under Section 18a (2) estimating the tax payable at Rs. 15,000 and paid Rs. 5,000 on September 22, 1960, and Rs. 10,000 on December 26, 1960. Subsequently, on March 15, 1961, the assessee sent a cheque for Rs. 76,150 drawn on the Punjab National Bank Ltd. , Ludhiana, along with a letter of even date. The ITO wrote a letter dated March 16, 1961, to the assessee asking it to submit a revised estimate of its total income. The assessee replied to this letter, vide letter dated March 20, 1961, that the payment was made on the basis of the demand notice under Section 18a (1) dated July 6, 1960. The cheque was endorsed by the ITO in favour of the State Bank of India, Ludhiana, on April 3, 1961, and was encashed on April 24, 1961.
(3.) THE assessse filed a return of its income declaring an income of Rs. 9,48,160 and the assessment was completed on a total income of Rs. 11,37,651. In consequence of the assessment a demand notice dated March 30, 1966, was issued to the assessee. As the estimate filed by the assessee under Section 18a (2) was found to be untrue, penalty proceedings under Section 273 (a) of the 1961 Act were initiated at the time of completing the assessment. After giving an opportunity of being heard to the assessee, the ITO imposed a penalty of Rs. 7,615.;