TMI Blog1958 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... al court confirmed that decision. It was held by the appeal court that when the revisional court interferes with the order of the court below, the result is not that the order of the lower court is merged in the order passed by the revisional court, but the result is that the order of the revisional court sets aside or modifies the of the lower court. Whereas in the case of an appeal when the appeal is dismissed the appellate court confirms the decree of the trial court, in the case of a revisional court when it dismisses the petition in revision all that it does is that it does not interfere with the order of the court below. The effect of the dismissal of the petition is not to confirm the order of the trial court, because no confirmation is necessary from the revisional court. When the revisional court dismisses the petition, the true effect in law is that it refuses to exercise the revisional jurisdiction conferred upon it. The penal interest that can be charged to any assessee under sub-section (6) can only be in respect of an assessee who has paid tax under sub-section (2) or sub-section (3) on the basis of his own estimate, and the assessee in the case before us could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 35 should not be passed on her levying penal interest in respect of these years. Ultimately, the Income-tax Officer passed three orders, two of them on 3rd March, 1956, and one on 20th March, 1956. 4. There being no appeal under the statute against an order made under section 35, the assessee preferred revision applications to the third respondent, which applications were dismissed by him on 3rd January, 1958. The assessee thereupon preferred this petition to this court asking for a writ of certiorari or any other appropriate writ in the matter. 5. The petition was filed on 26th June, 1958, and one of the contentions urged on behalf of the Revenue - we shall examine it a little later - is that there is inordinate delay in the filing of this petition and that on that ground alone this petition should be dismissed in limine. Mr. Palkhivala, learned counsel for the assessee, at the very outset of his argument stated that he did not propose to argue the case of the petitioner in respect of the earlier years and would only confine his submissions to the penal interest levied in respect of the year 1951-52. Briefly stated, the argument of counsel for the assessee is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimate of the tax payable by him on that part of his income to which the provisions of section 18 do not apply of the said previous year calculated in the manner laid down in sub-section (1) and shall pay the amount, on such of the dates specified in that sub-section as have not expired, by installments which may be revised according to the proviso to sub-section (2)... (6) Where in any year an assessee has paid tax under sub-section (2) or sub-section (3) on the basis of his own estimate, and the tax so paid is less than eighty per cent. of the tax determined on the basis of the regular assessment, so far as such tax relates to income to which the provisions of section 18 do not apply and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of six per cent, per annum from the 1st day of January in the financial year in which the tax was paid up to the date of the said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said eighty per cent. : Provided that for any period after the 31st day of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, and finally we decided in that case that as there was nothing on the record to show that the failure to charge interest was due to the failure to discharge his obligation on the part of the Income-tax Officer under section 18A(6), it was not possible to hold that the omission to charge interest must necessarily be ascribed to an error of law on the part of the Income-tax Officer and that the Income-tax Officer had, therefore, no jurisdiction to pass the order of rectification. The argument of counsel for the assessee is that the present case is wholly covered by the ratio disdained of Shantilal Rawji's case. 8. Two contentions were raised before us at the very outset and it was said that they are of the nature of preliminary objections which went to the root of the matter. The first objection of Mr. Joshi, learned counsel for the Revenue, was that in this case there was inordinate delay in the matter of the presentation of this petition to the court. It was said that the assessment was made in 1953, the order of the Income-tax Officer whereby he charged penal interest was made on 20th March, 1956, and the petition was filed on 26th June, 1958. The submission was that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition had asked that the order passed by the third respondent may be quashed, it was not necessary for her to seek that relief at our hands. It was competent to her and open to her to come to this court only for the purpose of challenging the validity of the three orders and the three notices of demand issued by the second responded. The order of the Commissioner, as we shall immediately point out, does not affect the relief which she would get if she was ultimately entitled to the same from this court. The real question here is : what is the operative order that she challenges on this petition ? or to put it differently, what is the enforceable order that she is challenging on this petition ? Is it the order of the Income-tax Officer or is it the order dismissing the revision application by the Commissioner of Income-tax ? 10. It has been argued by Mr. Joshi that revision is just like an appeal and the final order with which we would concern ourselves is the order of the Commissioner and not the order or orders which the Income-tax Officer has passed. It is said that the Supreme Court has held that where a decree is passed in appeal, the decree of the trial court is merged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been ruled, has the same effect as an order of reversal would have had in so far as it leaves the decree of the appellate court as the only decree in existence for the purpose of execution and the decree of the lower court becomes incorporated in it. This cannot be said of an order dismissing a revisional application. When a revisional application is dismissed, there is no confirmation of any decree or order, but there is only a refusal by the court to exercise its powers of supervision. In such a case the decree or order under revision is left untouched, neither confirmed, nor varied, nor reversed, and it remains a decree or order of the lower court, which can be executed. 12. The principle of the decision of the appeal court is clearly applicable to the point raised by Mr. Joshi and the present contention must, therefore, be negatived. 13. It is next argued by Mr. Joshi that the decision relied upon by learned counsel for the assessee does not touch the present case and Mr. Joshi has drawn our attention to the various provisions of section 18A and its sub-section which run into a number of pages. The argument has been that the decision in the case of Shantilal Rawji clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat she had not made any payment of tax in accordance with any of the provisions of the section and the language of sub-section (8) is mandatory and there is no proviso tacked on to sub-section (8) of the nature of the proviso engrafted on sub-section (6). In such a case, it is said, no question of waiver can arise as may happen in a case under sub-section (6). Mr. Joshi also indicated another argument which seemed to us to go contrary to the view which we had taken in the case of Shantilal Rawji and we did not allow him to press that argument. We shall not be referring to it, because in the view we take of the matter it is not even necessary for us to refer to that argument. We have made this observation only for the purpose of noting that Mr. Joshi had another argument to urge. 15. It has been strenuously contended before us by Mr. Palkhivala, learned counsel for the assessee, that there are words in sub-section (8) which, properly interpreted, must be read to incorporate all the provisos of sub-section (6) in sub-section (8), and the argument is on the principle of referential legislation or legislation by incorporation. There is little scope for this argument and, as we shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 meaning 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 applicable also to cases falling under sub-section (8). 17. In view of the fact that sub-section (8) explicitly speaks of the manner of calculating interest laid down in sub-section (6), learned counsel for the assessee had to go to the length or arguing that the expression calculated in sub-section (8) included the concept of reducing or waiving payment of interest by an assessee for which provision is made in the fifth proviso to sub-section (6). It has been stated that calculating interest in charging penal interest necessarily involves the power of the authority to reduce or waive the amount of interest. It is dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the language of the provision is mandatory and leaves little scope for any such suggestion. It has also been urged that calculations can always be variable because that would depend on the discretion of the Income-tax Officer. That certainly is not the meaning of the language employed in sub-section (8). 20. It is lastly urged that an anomalous situation must arise if we accept the contention of the Revenue. The Income-tax Officer under similar circumstances would have the power to reduce or waive the interest payable by an assessee if his case fell under sub-section (6) whereas he would have no such discretion vested in him to reduce or waive the amount of interest payable by the assessee if his case fell under sub-section (8). Now, as we have already indicated at the outset of our judgment, it would be our duty to see that as few anomalies as possible arise as a result of any interpretation that we put on any provision of the income-tax law. But as has so often been said, from the nature of things the provisions of income-tax law cannot be cast upon absolutely logical lines and if they cannot be cast upon absolutely logical lines they cannot be interpreted upon absolutely log ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e court in ascertaining the intention of the law-maker. In the case before us, it is not necessary for us to examine the history of legislation in any detail, but if it were necessary to do so the history of legislation would strongly support the contention pressed before us by Mr. Joshi. In the section as originally enacted, the fifth proviso was not there. It was incorporated in sub-section (6) by the Indian Income-tax (Amendment) Act, 1953. Let us, therefore, see how the relevant provisions of section 18A read before the amending Act of 1953. The language of sub-section (6) was in terms mandatory and calculation had to be made in accordance with the provisions laid down in sub-section (6) in a case which fell either under sub-section (6) or sub-section (8). There was no discretion of any kind or power of any kind vested in the Income-tax Officer to reduce or waive the interest payable by an assessee under any of those sub-sections and it was only by the newly added proviso that a discretion was vested in the Income-tax Officer of the nature which we have already mentioned and the proviso having been engrafted in sub-section (6) it was intended to apply to cases which fell within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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