9911796707
TMI Blog1983 (8) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... d a notice in terms of the proviso to s. 221 (1) was issued to the assessee requiring it to show cause why penalty should not be imposed for non-payment of taxes of Rs. 8,710 being the outstanding demand in respect of the asst. yr. 1977-78. Inspire of service of the show cause notice no explanation was submitted by the assessee before the ITO. In these circumstances, the penalty of Rs. 1,000 was imposed by the ITO on the assessee under s. 221 (1). 2. The matter was carried in appeal by the assessee before the AAC. It was asserted before him on behalf of the assessee that the tax demanded included interest amounting to Rs. 4,484 and that the tax assessed amounted to Rs. 4,306. It was also submitted that ineptly was at al to the imposed, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed by the ITO under s. 154 of the IT Act, 1961 have been placed before us. A perusal of these orders show that the assessment order as originally framed was rectified twice by the ITO. The ITO vide his order dt. 8th March, 1982 calculated the IT payable by the assessee for the asst. yr. 1977-78 at Rs. 148 only. The amount of interest payable was found to be Rs. 6,534 and so, the total amount payable was Rs. 6,895. On the basis of order dt. 8th March, 1982 passed by the ITO under/s. 154, it was submitted on behalf of the assessee that, even if penalty was impossible, it could be done only on the basis that the tax payable by the assessee was only Rs. 148. It was further contended that since the amount of penalty imposed by the ITO was Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable by the assessee cannot be taken in to consideration for the purpose of ascertaining if the assessee was in default in payment of tax and also for the purpose of determining the quantum of penalty. In taking this view, we stand fortified by the decision of the Calcutta High Court in the case of Shreeniwas & Sons. It has been held in this case that 'tax' and interest' are different in character. Under s. 221 of the IT Act, 1961, penalty can be imposed only when the assessee is in default in making payment of tax. It has further been held that as tax has been defined in s. 2 (43) there is no scope for any argument that' interest' is 'additional tax'. Accordingly, no penalty could be imposed for default in payment of interest under s. 221 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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