CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
Section 217 - Interest Payable by Assessee When No Estimate Made
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: Spent for assessment years 1989-90 onwards (section 214(3)); absorbed into section 234B. Live only for earlier years.
Finance Act, 2026: No amendment.
Mechanism: Interest (15% p.a.) where the assessee failed to send the statement/estimate required by the old section 209A/212, on the assessed tax (or shortfall), from 1 April following the financial year to the regular assessment - for assessment years up to 1988-89.
Litigation profile: Spent; companion of section 215 with sparse independent authority. Candour rule observed; function now in section 234B.
A. SECTION COMMENTARY
Section 217 charged interest where, on regular assessment, the Assessing Officer found that the assessee had failed to send the statement or estimate that the old section 209A (or section 212) required of him - in other words, where the assessee had defaulted not merely in paying but in the very act of estimating and reporting his advance tax. Interest ran at fifteen per cent per annum from 1 April next following the financial year up to the date of the regular assessment, on the 'assessed tax' as defined in section 215(5) (sub-section (1)) or, in the sub-section (1A) cases, on the shortfall. Sub-section (2) applied the machinery of section 215(2)-(4) - including the waiver power - to interest under this section.
Section 217 was the companion of section 215: where section 215 charged interest for an under-payment by an assessee who had filed an estimate, section 217 charged interest where the assessee had filed no estimate or statement at all. Both keyed their consequences to defaults under the old estimate machinery (sections 209A, 212). With the abolition of that machinery in 1988, section 217 lost its foundation; the present section 234B charges interest for shortfall in advance tax without reference to any estimate, absorbing the function of both sections 215 and 217.
Status today
Section 217 is spent for assessment years 1989-90 onwards (section 214(3)). It is reproduced for completeness; its principles - the compensatory character of the interest and its inclusion in the assessment - are those of section 215 and were carried into section 234B.
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this section. Editorial "[Omitted...]" notes are those of the Legislature.
217. (1) Where, on making the regular assessment, the Assessing Officer finds—
(a) that any such person as is referred to in clause (a) of sub-section (1) of section 209A has not sent the statement referred to in that clause or the estimate in lieu of such statement referred to in sub-section (2) of that section; or
(b) that any such person as is referred to in clause (b) of sub-section (1) of section 209A has not sent the estimate referred to in that clause, simple interest at the rate of fifteen per cent per annum from the 1st day of April next following the financial year in which the advance tax was payable in accordance with the said sub-section (1) or sub-section (2) up to the date of the regular assessment shall be payable by the assessee upon the amount equal to the assessed tax as defined in sub-section (5) of section 215.
(1A) Where, on making the regular assessment, the Assessing Officer finds that any person who is required to send an estimate under sub-section (4) of section 209A or any such person as is referred to in sub-section
(3A) of section 212 has not sent the estimate referred to therein, simple interest at the rate of fifteen per cent per annum from the 1st day of April next following the financial year in which the advance tax was payable in accordance with the said sub-section (4) or, as the case may be, sub-section (3A) up to the date of the regular assessment shall be payable by the assessee upon the amount by which the advance tax paid by him falls short of the assessed tax as defined in sub-section (5) of section 215.
(2) The provisions of sub-sections (2), (3) and (4) of section 215 shall apply to interest payable under this section as they apply to interest payable under that section.
C. AUTHORITIES
Section 217 is spent for assessment years 1989-90 onwards; it shared the foundation and character of section 215 and is now absorbed into section 234B. Direct authority is sparse; the candour rule is observed, and the section 215 line applies by extension. All citations have been web-verified.
Cluster 1 - 'No estimate' interest: character and successor
Section 217 shared the character and appellate treatment of section 215; the authorities below apply by extension. The candour rule is observed for the section's own text.
Central Provinces Manganese Ore Co. Ltd. v. CIT (1986) 160 ITR 961 (SC)
Relevance: Interest under section 217 (like section 215) is compensatory and forms part of the assessment, and is appealable on the ground that the levy is not attracted at all.
Use: Supplies the governing character and appellate route for section 217 interest.
Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC)
Relevance: Fixes 'regular assessment' as the terminal date and 'assessed tax' (section 215(5)) as the base for interest under section 217 (which adopts those definitions).
Use: Settles the period and base of the section 217 computation.
CIT v. Anjum M. H. Ghaswala (2001) 252 ITR 1 (SC) [Constitution Bench]
Relevance: The successor section 234B charges shortfall interest mandatorily and without reference to any estimate, absorbing the 'no estimate' function of section 217.
Use: Locates section 217's function in the present mandatory regime.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is omitted, spent or substantially unlitigated, the candour rule is observed - the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.
CHAPTER XVII - COLLECTION AND RECOVERY OF TAX - C.-ADVANCE PAYMENT OF TAX
Section 217 - Interest Payable by Assessee When No Estimate Made
Case Laws & Commentary - Income-tax Act, 1961 (as amended by the Finance Act, 2026) - bharattax.co Treatise
Status: Spent for assessment years 1989-90 onwards (section 214(3)); absorbed into section 234B. Live only for earlier years.
Finance Act, 2026: No amendment.
Mechanism: Interest (15% p.a.) where the assessee failed to send the statement/estimate required by the old section 209A/212, on the assessed tax (or shortfall), from 1 April following the financial year to the regular assessment - for assessment years up to 1988-89.
Litigation profile: Spent; companion of section 215 with sparse independent authority. Candour rule observed; function now in section 234B.
A. SECTION COMMENTARY
Section 217 charged interest where, on regular assessment, the Assessing Officer found that the assessee had failed to send the statement or estimate that the old section 209A (or section 212) required of him - in other words, where the assessee had defaulted not merely in paying but in the very act of estimating and reporting his advance tax. Interest ran at fifteen per cent per annum from 1 April next following the financial year up to the date of the regular assessment, on the 'assessed tax' as defined in section 215(5) (sub-section (1)) or, in the sub-section (1A) cases, on the shortfall. Sub-section (2) applied the machinery of section 215(2)-(4) - including the waiver power - to interest under this section.
The 'no estimate' counterpart of section 215
Section 217 was the companion of section 215: where section 215 charged interest for an under-payment by an assessee who had filed an estimate, section 217 charged interest where the assessee had filed no estimate or statement at all. Both keyed their consequences to defaults under the old estimate machinery (sections 209A, 212). With the abolition of that machinery in 1988, section 217 lost its foundation; the present section 234B charges interest for shortfall in advance tax without reference to any estimate, absorbing the function of both sections 215 and 217.
Status today
Section 217 is spent for assessment years 1989-90 onwards (section 214(3)). It is reproduced for completeness; its principles - the compensatory character of the interest and its inclusion in the assessment - are those of section 215 and were carried into section 234B.
B. STATUTORY POSITION (verbatim text)
Reproduced verbatim from the Income-tax Act, 1961 (as amended up to the Finance Act, 2025); the Finance Act, 2026 makes no amendment to this section. Editorial "[Omitted...]" notes are those of the Legislature.
217. (1) Where, on making the regular assessment, the Assessing Officer finds—
(a) that any such person as is referred to in clause (a) of sub-section (1) of section 209A has not sent the statement referred to in that clause or the estimate in lieu of such statement referred to in sub-section (2) of that section; or
(b) that any such person as is referred to in clause (b) of sub-section (1) of section 209A has not sent the estimate referred to in that clause, simple interest at the rate of fifteen per cent per annum from the 1st day of April next following the financial year in which the advance tax was payable in accordance with the said sub-section (1) or sub-section (2) up to the date of the regular assessment shall be payable by the assessee upon the amount equal to the assessed tax as defined in sub-section (5) of section 215.
(1A) Where, on making the regular assessment, the Assessing Officer finds that any person who is required to send an estimate under sub-section (4) of section 209A or any such person as is referred to in sub-section
(3A) of section 212 has not sent the estimate referred to therein, simple interest at the rate of fifteen per cent per annum from the 1st day of April next following the financial year in which the advance tax was payable in accordance with the said sub-section (4) or, as the case may be, sub-section (3A) up to the date of the regular assessment shall be payable by the assessee upon the amount by which the advance tax paid by him falls short of the assessed tax as defined in sub-section (5) of section 215.
(2) The provisions of sub-sections (2), (3) and (4) of section 215 shall apply to interest payable under this section as they apply to interest payable under that section.
C. AUTHORITIES
Section 217 is spent for assessment years 1989-90 onwards; it shared the foundation and character of section 215 and is now absorbed into section 234B. Direct authority is sparse; the candour rule is observed, and the section 215 line applies by extension. All citations have been web-verified.
Cluster 1 - 'No estimate' interest: character and successor
Section 217 shared the character and appellate treatment of section 215; the authorities below apply by extension. The candour rule is observed for the section's own text.
Central Provinces Manganese Ore Co. Ltd. v. CIT (1986) 160 ITR 961 (SC)
Relevance: Interest under section 217 (like section 215) is compensatory and forms part of the assessment, and is appealable on the ground that the levy is not attracted at all.
Use: Supplies the governing character and appellate route for section 217 interest.
Modi Industries Ltd. v. CIT (1995) 216 ITR 759 (SC)
Relevance: Fixes 'regular assessment' as the terminal date and 'assessed tax' (section 215(5)) as the base for interest under section 217 (which adopts those definitions).
Use: Settles the period and base of the section 217 computation.
CIT v. Anjum M. H. Ghaswala (2001) 252 ITR 1 (SC) [Constitution Bench]
Relevance: The successor section 234B charges shortfall interest mandatorily and without reference to any estimate, absorbing the 'no estimate' function of section 217.
Use: Locates section 217's function in the present mandatory regime.
Compiled for the bharattax.co Treatise on the Income-tax Act, 1961 (as amended by the Finance Act, 2026). Statutory text is reproduced verbatim from the bare Act; case-law citations have been web-verified. Where a section is omitted, spent or substantially unlitigated, the candour rule is observed - the absence of direct authority is stated and only genuinely cognate authority is offered. This digest is for professional reference and is not a substitute for the official report of any judgment.