1938 (7) TMI 12

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 8? The Commissioner contends that if once the Income Tax Officer starts proceedings under sub-section (1) of Section 28 within the time prescribed there, he is empowered to make an order imposing a penalty under that sub-section even after the assessment order has been finally made and the tax been paid. On behalf of the assessee on the other hand it is urged that the Income Tax Officer becomes functus officio after making the assessment order and that inasmuch as he is required to be satisfied and make his direction in the course of any proceedings under the Act, he can only impose a penalty at the time when he makes the assessment and not at any subsequent period, especially after the tax as assessed has already been paid. Unfortu .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... Legislature intended to restrict the exercise of the power conferred by this sub-section to the period when the liability of an assessee was determined and before the tax was paid and consequently this power cannot be exercised at a time when the tax has already been paid. The language as used in this section may be susceptible of this interpretation but it cannot be denied that the interpretation sought to be put upon it by the Commissioner is not impossible. Considering that the former interpretation may lead to absurd results and that the latter is more in consonance with reason, we have no hesitation in adopting the interpretation suggested by the Commissioner. There is no magic in the word payable . It is true that it has been fre .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ruction that can be put both in the interests of the Department and of the assessee. The Department will not be compelled to delay the assessment proceedings with a view to determine whether to prosecute an assessee under Section 52 or to impose a penalty on him under sub-section (1) of Section 28 or to do neither and the assessee will not run the risk of being victimised by any rash or hasty order. We accordingly answer the question propounded above in the affirmative. We, however, in the circumstances of the case, leave the parties to bear their own costs. We further draw the attention of the Commissioner to the desirability of approaching the Central Legislature with a view to remove the ambiguity that exists in the language of Sec .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X