TMI Blog1967 (7) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ember 15, 1961, and March 15, 1962. For the purposes of this judgment, the amount which the assessee was called upon to pay is not relevant. The assessee failed to pay the instalment which fell due on December 15, 1961. The Income-tax Officer required the assessee to pay immediately the tax instalment which was being demanded and which had remained unpaid and in default of the payment, the assessee was asked to treat the letter as a show-cause penalty notice for non-payment of tax on the due date. The assessee neither paid the tax nor appeared before the Income-tax Officer on the due date to explain to him the circumstances. Thereafter, on September 15, 1962, the Income-tax Officer imposed a penalty on the assessee in the sum of Rs 3,575, under section 46(1) read with section 18A of the Act. This penalty order was challenged before the Appellate Assistant Commissioner and the appeal was dismissed. Thereafter, there was a further appeal before the Tribunal and the Tribunal also dismissed the appeal, and, thereafter, the following question has been referred to us by the Tribunal : " Whether, on the facts and in the circumstances of the case, the penalty imposed upon the assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the revenue relied upon the provision of section 6 of the General Clauses Act. But our attention has been drawn to the decision of the Supreme Court in Kalawati Devi Harlalka v. Commissioner of Income-tax (Civil Appeal No. 1421 of 1966, decided on May 1, 1967). In that case, after examining the provisions of the General Clauses Act and also the entire scheme of section 297, which is the repealing section in the Act of 1961, the Supreme Court came to the conclusion that section 297 of the Act of 1961 is meant to provide, as far as possible, for all contingencies, which may arise out of the repeal of the 1922 Act, and the Supreme Court took the view that section 6 of the General Clauses Act would not apply because section 297(2) evidences an intention to the contrary. Section 6 of the General Clauses Act in the commencement portion indicates that the provisions of that section are to apply unless a different intention appears and after examining the provisions of sections 297(2), the Supreme Court came to the conclusion that since there is an intention to the contrary appearing in section 297(2), section 6 of the General Clauses Act will not apply. The Supreme Court then observed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be imposed as if the Act of 1922 were still in force, and having provided for such imposition of penalty under the provisions of the Act of 1922, clause (j) of section 297(2) of the Act of 1961 provides for the recovery of the sum, which is payable by way of penalty under the provisions of the Act of 1961. As regards the meaning of the word " assessment ", in Commissioner of Income-tax v. Khemchand Ramdas, the Privy Council has observed as follows " One of the peculiarities of most Income-tax Acts is that the word 'assessment' is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the taxpayer. The Indian Income-tax Act is no exception in this respect... " These observations were made with reference to the Act of 1922. This passage from the judgment of the Privy Council was cited with approval by the Supreme Court in C. A. Abraham v. Income-tax Officer, Kottayam, and after citing the aforesaid passage, Shah J., delivering the judgment of the Supreme Court, observed as follows : " A review of the provisions of Chapter IV of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous year had it been his total income the same proportion as the amount of such inclusions bears to his total world income : Provided that, where the previous year of the assessee in respect of any source of income ends after the 31st day of December and before the 30th day of April, the order in writing issued by the Income-tax Officer requiring the payment of income-tax and super-tax on that source of income shall substitute for the four quarterly payments hereinbefore specified, three payments of equal amount to be made on the 15th day of September, the 15th day of December and the 15th day of March, respectively. " Thus under the scheme of section 18A(1), the Income-tax Officer has to issue an order in writing requiring the assessee to pay in advance income-tax and super-tax on the four dates mentioned in the section. Further, the income-tax and super-tax so required to be paid are to be calculated on the basis of the income included in the total income of the latest previous year in respect of which the assessee has been assessed. Sub-section (2) of section 18A provides as follows : " (2) If any assessee who is required to pay tax by an order under sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. Therefore, under sub-section (11), though the tax is paid in advance in pursuance of the notice or order under section 18A(1)(a), this sum is to be treated as a payment of tax in respect of the income, which would be subject to tax in the next assessment year following the particular financial year in which the payments are made and it is to be deemed to be in respect of the income of the assessee for the relevant previous year with reference to that assessment year. Since it is open to an assessee to have a previous year different from the financial year, this provision under sub-section (11) was required to be made in order to adjust the advance payment of tax with reference to the tax liability for the following assessment year, i.e., assessment year following the financial year during which the payments are made. Under section 23B of the Act of 1922, power was given to the Income-tax Officer at any time after the receipt of the return made under section 22, to proceed to make in a summary manner, a provisional assessment of the tax payable by the assessee, on the basis of his return ; and the income-tax paid under section 18A in respect of any income provisionally asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted under the provisions of section 23 of the Act of 1922. An order under section 18A, according to this contention, was merely an order for payment of an ad hoc amount of tax and an order of provisional assessment under section 23B cannot be said to be an assessment completed because the completion of the assessment takes place only when the order for assessment is passed on a regular assessment under section 23B. If this argument were to be accepted, we will have to put a very narrow meaning on the word " assessment ", viz., computation of income. As has been pointed out in C. A. Abraham's case, section 23 deals with " assessment " merely as computation of income but if the word " assessment " occurring in the rest of the sections of Chapter IV of the Act of 1922 is to be interpreted in the sense of the whole procedure laid down in the Act for imposing liability upon the taxpayer, it is clear that there may be various steps in this procedure for imposing the tax liability upon the taxpayer ; and each of such steps can be completed though the computation of income under section 23 is not completed or is yet to be completed. The legislature has not used the words " completed fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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