1961 (9) TMI 82 - HC - Income Tax

Summary

Issues:
1. Jurisdiction of levy of interest under section 18A for non-payment of advance income tax.
2. Interpretation of section 18A(8) of the Income-tax Act.
3. Requirement of a separate order for imposing interest under section 18A.
4. Applicability of appeal provisions in cases of interest under section 18A.
5. Delay and latches in approaching the court for relief under article 226.

Analysis:

1. Jurisdiction of levy of interest under section 18A:
The petitioner contested the levy of interest under section 18A for non-payment of advance income tax, arguing that a larger amount was refundable to him, which should have been adjusted against the demand for advance tax. The court held that the provision of sub-section (8) of section 18A deems no payment made unless in accordance with the specified provisions. The court emphasized that the refundable amount or its adjustment does not qualify as payment as per the section, thus upholding the jurisdiction of the levy of interest.

2. Interpretation of section 18A(8):
The court examined the language of section 18A(8) which mandates interest addition if no tax payment is made as per the section's provisions. The court clarified that the provision applies when the advance tax is not paid as required, regardless of any refundable amounts to the taxpayer. The court rejected the petitioner's argument that adjustment of refundable amounts should negate the interest levy, affirming the interpretation of section 18A(8).

3. Requirement of a separate order for imposing interest:
The petitioner contended that no separate order imposing interest was passed, challenging the validity of the interest demand. The court explained that under section 18A(8), interest calculation is part of the regular assessment process, and no separate order for interest imposition is necessary. The court dismissed this argument, emphasizing that interest calculation is integral to the assessment order.

4. Applicability of appeal provisions in interest cases:
The court highlighted that no provision for appealing against interest liability under section 18A(8) existed in the Income-tax Act, as established in previous court decisions. The petitioner's pursuit of appeals before the Appellate Assistant Commissioner and the Tribunal was deemed futile and incompetent. The court criticized the petitioner's delay in approaching the court under article 226, ultimately dismissing the petition on grounds of delay and latches.

5. Delay and latches in seeking relief under article 226:
The court censured the petitioner for pursuing fruitless appeals despite the court's precedent that no appeal lay for interest under section 18A. The court emphasized the petitioner's obligation to seek timely relief under article 226, deeming the petitioner's actions as evidence of gross negligence. The court dismissed the petition on the basis of delay and latches, imposing costs on the petitioner.

In conclusion, the court upheld the jurisdiction of the levy of interest under section 18A, interpreted the provisions of section 18A(8) to affirm interest liability, clarified the absence of a separate order for imposing interest, and criticized the petitioner's delay in seeking relief under article 226, ultimately dismissing the petition.