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TMI Blog1978 (3) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 29, 1972, the ITO gave effect to the AAC's order as a result of which a sum of Rs. 1,80,136 became refundable. The assessee filed an appeal to the AAC against this order of the ITO giving effect to the AAC's order. It may in this connection be mentioned that the ITO in his order dated May 30, 1972, had, inter alia, held as follows Rs. " Tax is calculated as under: Income-tax @ 55% 1,89,289 Less: Rebate on export profit of Rs. 7,030 387 -------------------- 1,88,902 Less: Advance tax paid 11,00,000 --------------------- 9,11,098 Less: Amount already refunded u/s. 141A 9,80,858 --------------------- 69,760 Interest u/s. 214 1,30,514 Less: Amount already refunded 1,40,260 9,746 ---------------- Total tax payable 79,506 " -------------------- The only point taken up before the AAC was that interest under s. 214 was not properly granted. The appeal was dismissed by the AAC as incompetent as, according to the AAC, no appeal was provided against any order under s. 214. Aggrieved by the decision of the AAC, the assessee went up in appeal before the Tribunal and the Tribunal held that the AAC was right in his decision that no appeal lay before him. The Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for any period after the date of such provisional assessment. (1A) Where on completion of the regular assessment the amount on which interest was paid under sub-section (1) has been reduced, the interest shall be reduced accordingly and the excess, if any, paid shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly. (2) On any portion of such amount which is refunded under this Chapter, interest shall be payable only up to the date on which the refund was made. " It may be mentioned that s. 214 appears in Chap. XVII dealing with the collection and recovery of tax. Counsel for the assessee contended that as excess interest paid by the Govt. (excess because Govt. paid interest on the basis of the provisional interest which had to be reduced on regular assessment) has been deemed to be tax payable by the assessee and the provisions of the Act had been made applicable, accordingly if there has been any excess in the determination of such an excess interest and as such refundable to the assessee, the same would be a determination of the tax by the fiction introduced under sub-s. (1A) of s. 214 of the Act and, therefore, under cl. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the Supreme Court, given, and the assessee must be deemed to have failed to comply with it. Thus, s. 28 of the Act would apply according to the Supreme Court on its own terms. The ITO was, therefore, competent to impose penalty under s. 28 read with s. 18A(9)(b) of the Indian I.T. Act, 1922, in respect of the failure to submit an estimate under s. 18A(3) of the said Act. In the case of Addl. ITO v. E. Alfred [1962] 44 ITR 442 (SC), one had died intestate leaving behind him a son, and eight daughters. For the assessment year 1946-47, a notice was issued to the son under s. 22(2) of the Indian I.T. Act, 1922, in regard to E's income and E was assessed under s. 24B(2) of the Act of 1922. As after service of the notice of demand the son defaulted in payment of the tax, penalties were imposed upon him under s. 46(1) of the said Act. The son thereafter challenged the levy of penalty and the High Court quashed the orders imposing penalty. On appeal, the Supreme Court reversed the decision of the High Court and held that the penalty could be imposed on the son as an assessee and that the orders levying penalties were valid. He was himself an assessee qua the assets and liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est which is to be paid by the Government. That interest cannot be recovered from the Government by an assessee as a tax. Therefore, no question of making the same recoverable as tax arises and as such no question of providing an appeal therefrom would arise. Sub-section (1A) of s. 214 deals with excess interest paid which is recoverable from the assessee and that has to be treated as tax. Counsel for the revenue, then, contended that s. 214(1A) had made the excess interest tax only for the purpose of recovery. He drew our attention to the heading of Chap. XVII which deals with collection and recovery of tax. He, therefore, submitted that such excess interest was to be treated as tax only for the purpose of collection and recovery and not for appeal which is a matter of substantive right. It is, however, difficult to accept this contention because Parliament has not chosen to use the expression " shall be deemed to be tax " for the purpose either of any specific section or of any specific chapter. Parliament has provided for two matters. It has provided that it shall be deemed to be tax payable by the assessee. That is one deeming that Parliament has enjoined. The other part of it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of reopening either under s. 34 of the Indian I.T. Act, 1922, or the I.T. Act, 1961, it was never suggested that the substantive law would be anything different than the law prevalent for the relevant assessment year. In this case to hold that s. 214(1A) was merely made for excess income-tax paid for the purpose of recovery and collection would make this fiction redundant in view of the provisions of s. 229 of the Act. Section 229 of the Act reads as follows : " 229. Recovery of Penalties, fine, interest and other sums.-Any sum imposed by way of interest, fine, penalty, or any other sum payable under the provisions of this Act, shall be recoverable in the manner provided in this Chapter for the recovery of arrears of tax." In view of this provision, if Parliament wanted that sub-s. (1A) of s. 214 would be only for the purpose of collection of revenue then such deeming as provided in sub-s. (1A) of s. 214 was wholly unnecessary. We cannot ascribe such redundancy to the expressions of the Legislature if it can be avoided. Furthermore, it appears that in some cases Parliament has made use of fiction for limited purposes as would be apparent from a reference to s. 12, s. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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