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TMI Blog1978 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... y C.N. Laik J. for, in the opinion of the learned judge, it involves certain intricate questions of law. The principal point that is involved in this rule is whether for the penalty levied on the assessee by the Income-tax Officer under section 221 of the Income-tax Act, 1961, hereinafter referred to as the Act, a certificate can be issued under section 222 of the Act for the recovery of the amount of penalty. The learned Additional District Magistrate is of the view that no penalty can be imposed under section 221 for the failure of the assessee to pay advance tax and, as such, the question of its recovery under section 222 of the Act does not arise. In that view of the matter, the learned Additional District Magistrate has, by the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time to time direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears: Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard: Provided further that where the Income-tax Officer is satisfied that the default was for good and sufficient reasons, no penalty be levied under this section. (2) Where as a result of any final order the amount of tax, with respect to the default in the payment of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the amount of penalty paid shall be refunded." Section 222, inter alia, provides for the issue of a certificate by the Income-tax Officer to the Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of tax which, in view of our above decision in Sikri and Sons [1978] 112 ITR 529 (Cal), includes advance tax. Sub-section (2) directs cancellation of the penalty levied and the refund of the penalty paid by the assessee if, as a result of any final order, the amount of tax in respect of which the default has been committed, is wholly reduced. If, therefore, at the general assessment, the amount of advance tax is wholly reduced, " the amount of penalty paid shall be refunded ". Sub-section (2) indicates levy of penalty and payment of the same by the assessee before the final assessment of tax. It does not, however, contemplate that penalty can be recovered before the final assessment of tax by the Income-tax Officer, for it does not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant on section 229 of the Act which provides that any sum imposed by way of interest, fine, penalty, or any other sum payable under the provisions of the Act, shall be recoverable in the manner provided in Chapter XVII for the recovery of arrears of tax. Section 229 only permits recovery of any interest, fine or penalty under the provisions of that Chapter, but it does not authorise such recovery on the basis of an order which has not attained a finality. Section 229, therefore, does not at all support the contention of the petitioner that the penalty imposed on an assessee for his default to pay advance tax is recoverable by the issue of a certificate under section 222 of the Act before the completion of assessment. The impugned certificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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