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Advance tax non payment prosecution

Sivaiah Ganga (68 Points)

14 April 2017

Whether non payment of advance tax attracts attachment of bank accounts and even prosecution....

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160551 Points)
Replied 14 April 2017

PENALTIES & PROSECUTION for default in case of advance tax:

(i) When the assessee is in default or is deemed to be in default in making payment of tax, including the tax deducted at source, advance tax and the self assessment tax. [Section 221 read with Sec.201(1)]

(ii) Failure to pay the advance tax as directed by the Assessing Officer or as estimated by the assessee. [Section 273(1)]

OFFENCES AND PROSECUTIONS

Section 276C(2): Wilful attempt to evade payment of any tax, penalty or interest (non-cognizable offence under section 279A

Reference: https://incometaxindia.gov.in/Charts%20%20Tables/Penalties%20and%20Prosecutions.htm

Sivaiah Ganga (68 Points)
Replied 14 April 2017

Sir, then why advance tax is defined in sec 2(1) and tax is defined in sec 2(43)... Why there are two definitions...can we say advance tax is also tax even though they were separately defined in sec 2.....further there are two demand notices for tax and advance taxes... For tax, it is form 7 and form 28...nowhere in form 28, it is mentioned that even penalty can be levied for non payment of advance tax.... Please see the decision of kerala high court reported in 167 ITR 103 wherein it is clearly held that 276C(2) will be attracted only when assessment is completed. Since in case of advance tax, assessment is not completed, prosecution cannot be attracted u/s 276C(2).....Sir, could you please elaborate under which section prosecution can be launched for non payment of advance tax...

Sivaiah Ganga (68 Points)
Replied 15 April 2017

More over the section quoted by you ie 273(1) is no more applicable as 273(3) says it is applicable for the AY 1988-89 and earlier years...

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160551 Points)
Replied 15 April 2017

"Charge interest u/s 234B/C for non-payment of advance tax. Penalty proceedings u/s 271(1)(c) are initiated separately for furnishing of in-accurate particulars of income assessed. The Assessing Officer is directed to calculate the tax and interest on this income and issue Demand Notice and Challan to the assessee firm"

Supreme court Of India : Commr.Of Income Tax,Simla vs M/S Green World Corporation on 6 May, 2009 (Civil appeal no. 3312 OF 2009)

Read: https://indiankanoon.org/doc/1365000/