Section 210

Section 210 — the law in short

What the courts have decided on section 210, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• DIT v Mitsubishi Corporation Supreme CourtCuts both ways
  My Indian payer did not deduct tax at source and paid me gross. The Assessing Officer says I should have paid advance tax and has charged s.234B interest. Which years can he do that for?
  Only from financial year 2012-13 onwards. The Supreme Court held that for every assessment up to and including financial year 2011-12, s.209(1)(d) entitled the assessee to reduce, in computing its advance tax, the income-tax that WOULD BE deductible at source, even though it had in fact received the full amount without deduction — so no s.234B interest could be charged. The proviso to s.209(1)(d) inserted by the Finance Act 2012 with effect from 1 April 2012 reverses that, and from financial year 2012-13 the assessee cannot reduce tax that the payer failed to deduct.
• CIT v Smt. Premlata Jalani High CourtHelps taxpayerValidity unconfirmed
  My capital gain arose after 15 March, so I could not have paid advance tax on it in any instalment. The Assessing Officer has charged s.234C interest from the first instalment date. Can he?
  No. The Rajasthan High Court held that the liability to pay advance tax on a capital gain arises only once the gain has accrued, so interest under s.234C on the shortfall attributable to that gain can run only from the date the advance tax on it became payable, and not from any earlier instalment date. Where the gain arose after 15 March, the proviso required only that the tax be paid by 31 March, and interest ran for that period alone.
• Statutory position — s.210(3) to (6): the Assessing Officer's order to pay advance tax, the assessee's own lower estimate in Form 28A, and s.218 default CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  The Assessing Officer has served an order in February requiring my client to pay advance tax on the basis of an earlier year's assessed income. Can he do that, and what can my client do if the current year's income will be far lower?
  He can, but only within the limits s.210(3) sets: the power exists only where the person has already been assessed by way of regular assessment for some previous year, it must be exercised 'at any time during the financial year but not later than the last day of February', it must be by order in writing, the tax must be calculated in the manner laid down in s.209, and a notice of demand under s.156 specifying the instalments must issue. If the current income will be lower, s.210(5) lets the assessee send an intimation in the prescribed form — Form No. 28A under rule 39 — and pay according to his own estimate instead; if it will be higher, s.210(6) obliges him to pay the higher amount by the last instalment date without waiting to be asked.
• Statutory position — s.211: the four advance tax instalments, and the single 15 March instalment for a s.44AD or s.44ADA presumptive assessee CBDT Circulars & InstructionsCuts both ways
  My client returns income under s.44AD. The CPC has charged s.234C interest on four instalments. Is a presumptive assessee not entitled to pay the whole advance tax by 15 March?
  He is. Section 211(1) now splits assessees into two classes: clause (a) covers 'all the assessees, other than the assessee referred to in clause (b)', who pay in four instalments — fifteen per cent by 15 June, forty-five per cent by 15 September, seventy-five per cent by 15 December and the whole by 15 March, each cumulative and reduced by earlier instalments; clause (b) covers 'an assessee who declares profits and gains in accordance with the provisions of sub-section (1) of section 44AD or sub-section (1) of section 44ADA', who pays 'to the extent of the whole amount of such advance tax during each financial year on or before the 15th March'. Section 234C(1)(b) mirrors this exactly, charging a presumptive assessee interest only on the shortfall from the tax due on the returned income as at 15 March.
• Statutory position — s.209(1)(d) and its proviso: credit against advance tax for tax deductible but not actually deducted CBDT Circulars & InstructionsCuts both ways
  My client is a payee whose income should have suffered TDS but the payer deducted nothing. Can he still reduce his advance tax by that tax when computing his liability, and does it matter which year it is?
  It depends entirely on which side of 1 April 2012 the financial year falls. Clause (d) of s.209(1) reduces the income-tax computed under clause (a), (b) or (c) by 'the amount of income-tax which would be deductible or collectible at source during the said financial year' on income taken into account in the computation — words wide enough to cover tax that was deductible but never deducted; but the proviso inserted in clause (d) by s.83 of the Finance Act, 2012 removes that reduction where 'the person responsible for deducting tax has paid or credited such income without deduction of tax', so from the financial year 2012-13 onwards a payee who was in fact paid gross cannot use the deductible-but-not-deducted amount to wipe out his advance tax.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.