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TMI Blog1962 (8) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... income declaring that the income was Rs.11,143. The Additional Income-tax Officer, Virudhunagar, completed the assessment on 17th March, 1953, and determined the total income of the assessee as Rs. 25,129. On appeal by the assessee to the Appellate Assistant Commissioner, Madurai, this assessment was set aside on 11th July, 1955. The Income-tax Officer was directed by the appellate authority to make a fresh enquiry regarding the real ownership of the match business, whether it belonged to her or to her husband, and to make a further assessment. The Income-tax Officer made a fresh assessment on 7th March, 1958. He held that the business belonged to the assessee and not to her husband and computed the total income as Rs. 47,586 and levied a tax of Rs. 14,749.93. The officer also levied penal interest of Rs. 4,669.06 on the assessee under section 18A(8) of the Act. This order was challenged by the assessee by preferring an appeal to the Appellate Assistant Commissioner. One of the grounds urged in the appeal by the assessee related to the levy of penal interest. It was contended that the Income-tax Officer failed to exercise the discretion vested in him under rule 48 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d super-tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed, if that total income exceeded the maximum amount not chargeable to tax in his case by two thousand five hundred rupees .......... 18A. (2) If any assessee who is required to pay tax by an order under sub-section (1) estimates at any time before the last instalment is due that the part of his income to which that sub-section applies for the period which would be the previous year for an assessment for the year next following is less than the income on, which he is required to pay tax and accordingly wishes to pay an amount less than the amount which he is so required to pay, he may send to the Income-tax Officer an estimate of the tax payable by him calculated in the manner laid down in sub-section (1)...... and shall pay such amount as accords with his estimate in equal iastalments on such of the dates specified in sub-section (1) ..... 18A. (3) Any person who has not hitherto been assessed shall, before the 15th day of March in each financial year, if his total income of the period which would be the previous year for an assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on making the regular assessment, the Income-tax Officer finds that no payment of tax has been made in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in sub-section (6) shall be added to the tax as determined on the basis of the regular assessment. Rule 48.-The Income-tax Officer may reduce or waive the interest payable under section 18A in the cases and under the circumstances mentioned below, namely : (1) When the relevant assessment is completed more than one year after the submission of the return, the delay in assessment not being attributable to the assessee. (2) Where a person is under section 43 deemed to be an agent of another person and is assessed upon the latter's income. (3) Where the assessee has income from an unregistered firm to which the provisions of clause (b) of sub-section (5) of section 23 are applied. (4) Where the 'previous year' is the financial year or any year ending about the close of the financial year and large profits are made after the 15th of March, in the circumstances which could not be foreseen. (5) Any case in which the Inspecting Assistant Commissioner considers that the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a proviso (Moulton Lord Justice in Rex v. Dibdin ). It is, however, pointed out by the learned counsel for the assessee that the language of sub-section (8) is sufficiently wide to incorporate in it the fifth proviso of sub-section (6). Reliance is placed on the words "interest calculated in the manner laid down in sub-section (6)". The argument is that the levy of interest under sub-section (8) is cast in the same mould as that in sub-section (6) and the jurisdiction and power of the department are identical in regard to both sets of cases in sub-sections (6) and (8). We have, therefore, to examine the terms of sub-section (8) closely to ascertain the true intention of the legislature--Whether it had in view the conferment of the benefit of the fifth proviso of sub-section (6) to the assessee failing under sub-section (8). Now, sub-section (8) makes the assessee liable to pay "interest, calculated in the manner laid down in sub-section (6)". The discretion of the Income-tax Officer to reduce or waive interest payable by an assessee under such circumstances as may be prescribed is not a component of calculation, nor is it a feature of the manner of computation of interest. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ger by profession, was subjected to levy of penal interest as a result of the application of section 18A(8). The question raised was whether the Income-tax Officer was bound in law to apply the fifth proviso of sub-section (6) to a case directly falling within sub-section (8). The Bombay High Court answered the question in the negative. At page 534, the learned Chief Justice observes thus : "If the intention of the legislature was to incorporate all the provisions in those provisos under sub-section (8), it was not necessary for it to refer in express and explicit terms to the manner of calculating interest laid down in sub-section (6) in enacting sub-section (8). It is clear, therefore, that in sub-section (8) the legislature thought it necessary only to bring that part of sub-section (6) within the ambit of sub-section (8) which it thought was necessary to work out the provisions of sub-section (8) and this provision only refers, as we have just stated, to the manner of 'calculating interest' and nothing else. With these express words in sub-section (8) in reference to sub-section (6), it is extremely difficult to see how the last proviso of sub-section (6) is to be read as app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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