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TMI Blog1968 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... accounting period. The applicant was a new assessee and, therefore, section 18A(3) of the old Act was applicable to it. Section 18A(3) ran as follows : " 18A(3). Any person who has not hitherto been assessed shall, before the 15th day of March in each financial year, if his total income of the period which would be the previous years for an assessment for the financial year next following is likely to exceed the maximum amount not chargeable, to tax in his case by two thousand five hundred rupees, send to the Income-tax officer an 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)." Under this section, read with section 18A(1), there was clearly an obligation on the part of the applicant to submit an estimate of the tax payable by him and pay the amount by equal installments on the 15th of December, 1961, and on the 15th of March, 1962. The applicant, however, did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner, therefore, sustained the penalty of Rs. 500 imposed by the Income-tax Officer. At the hearing before us it was contended on behalf of the applicant that, in the first place, section 298 of the new Act was ultra vires in so far as it authorises the Central Government to " do anything " in the garb of removal of difficulties. This, it was contended, amounts to excessive delegation of powers, including legislative powers, and it should be struck down on that ground. Secondly, it was argued, assuming that section 298 was validly enacted, the Central Government went beyond the powers conferred by section 298 in promulgating the Removal of Difficulties Order No. 2 of 196 3. which authorised the Income-tax Officer to levy penalty under section 273 of the new Act in respect of default under section 18A(3) committed under the old Act. It was contended that the power conferred by the legislature on the Central Government under section 298 related only to details regarding the working of taxation laws; such powers were not intended to be exercised for imposition of penalty in respect of a default committed under an Act which had been repealed. It was also contended th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as the repealed Act), which he knew or had reason to believe to be untrue, or where he has without reasonable cause failed to furnish an estimate of the tax payable by him under sub-section (3) of section 18A of the repealed Act in respect of the said financial year, the provisions of section 273 of the Income-tax Act, 1961 (XLIII of 1961), shall apply as if the references in that section to the provisions of section 212, Chapter XVII-C, section 215, section 210 and section 217 were, so far as may be, references to the corresponding provisions of section 18A of the repealed Act." From the terms of section 298 of the new Act quoted above, it would appear that the Central Government has been authorised by the legislature to make a general or special order for the purpose stated therein provided the following two conditions are satisfied, namely: (i) that there is a difficulty in giving effect to the provisions of the new Act, and (ii) that such order is not inconsistent with such provisions. As regards the first pre-condition, there is no doubt that the Central Government was faced with an obvious difficulty. As we have already noticed, the applicant was liable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of the revenue, section 6 of the General Clauses Act, 1897, appears to have been also pressed into service to validate the impugned notice. The learned judge observed that, as the Commissioner could take action under section 33B of the old Act, even after its repeal, in view of the saving provisions of section 297(2)(a) of the new Act, it was not necessary to determine whether section 6 of the General Clauses Act also saved the power of the Commissioner under section 33B of the old Act, but he remarked as follows: " If it had been necessary so to do, I would have no hesitation in holding that such power would be saved under section 6, clauses (c) and (e), of the General Clauses Act, there being no indication to the contrary in the repealing Act of 1961." When the case eventually went up in appeal to the Supreme Court, and it has been reported in 66 I.T.R. 680, Sikri J. quoted the above remarks of Banerjee J., but he held that section 6 of the General Clauses Act had no application to the case inasmuch as a contrary intention appeared from the language and content of section 297(2) which provided for all matters relating to assessments including revisions under section 33 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment." He contended that, as there has been no regular assessment under the new Act, section 273 was not attracted. The contention is, however, misconceived inasmuch as the regular assessment for the relevant assessment year 1962-63 was clearly made under the new Act. We are not satisfied that the provisions of the order are inconsistent with the provisions of the new Act which also imposes penalty for failure to pay advance tax in the same way as the old Act did. We are unable to hold, therefore, that the Central Government exceeded its powers in promulgating the Income-tax (Removal of Difficulties) Order No. 2 of 1963. There is also nothing in the content or the terms of the order to suggest that it is discriminatory in nature. It applies equally to all assessees who were liable to pay advance tax and furnish estimates under the old Act for the financial year 1961-62, but defaulted in doing so. The Income-tax Officer has no discretion in the matter. He has to impose penalty on all such defaulters and the order gives him no scope for meting out differential treatment to them. If some assessees had escaped penal proceedings, before the promulgation of the order on 11th Jun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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