Commissioner of Income Tax vs Dhanraj Mundra

This is an application u/s 256(2) of the Income Tax Act, 1961 (for short "the Act"), whereby the Commissioner of Income Tax, Udaipur, has sought for a direction to the Income Tax Appellate Tribunal to refer the following question of law to this court for determination :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no interest can be charged u/s 217(1) or Section 217(1A) as the assessee has filed the estimates and has paid tax accordingly, by ignoring the fact that the assessee had filed the estimate u/s 209A(1) whereas the Assessing Officer charged interest u/s 217(1A) for non-filing of estimates u/s 209A(4) of the Income Tax Act ?"

The Commissioner moved an application u/s 256(1) of the Act before the Income Tax Appellate Tribunal for referring the above question of law to this court. The Tribunal rejected the above application vide its order dated May 4, 1998, holding that the answer to the question is self-evident and, therefore, it need not be referred.

Having heard learned counsel for the Revenue, we are of the opinion that the question raised is a question of law as it involves interpretation of statutory provision and effect of omission of Section 209A of the Act with effect from April 1, 1988, on the obligation of the assessee to furnish estimate of his income u/s 209A during the financial year relevant to the assessment year 1988-89, which requires consideration.

The Tribunal has erred in rejecting the application u/s 256(1) of the Act on the ground that the answer is self-evident.

In this view of the matter, we allow this reference application and direct the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur, to refer the following question for determination to this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that no interest can be charged u/s 217(1) or Section 217(1A) when the assessee has filed the estimate of his income u/s 209A(1) and paid tax accordingly, and that he was not required to file estimate of his income u/s 209A(4) of the Income Tax Act, thereafter?"