TMI Blog1963 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... to quash the levy and the demand for payment of the penal interest on the ground that such levy is bad in law and wholly without jurisdiction. The petitioner is the karta of a Hindu undivided family. It is not denied that as part of the assessment for the above three years, certain demands, inclusive of penal interest under section 18A were made upon the assessee. The petitioner has so far discharged a portion of the liability towards the tax and there is a balance still payable by him. The department took steps towards recovery by issue of certificates to the Collector and the Collector has attached the petitioner's lands and house under the Revenue Recovery Act. The petitioner filed revision petitions before the Commissioner challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a reassessment. It is, therefore, claimed that the levy of interest under section 18A is fully sanctioned by the provisions contained therein. A fact of some importance is that the assessee is a new assessee, he not having been previously assessed. The circumstance has not been disclosed in the petition. Since the contention lies within a very narrow compass, the relevant provision of the Act may be referred to. Section 18A lays down the rules regarding the advance payment of tax. This provision is attracted in cases of assessees in respect of whom income-tax cannot be deducted at source under section 18. Broadly stated, an assessee is required to pay in four quarterly instalments one quarter of the income-tax and super-tax payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the regular assessment.....simple interest at the rate of six per cent. per annum from the first 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 80 per cent..... The expression used in this provision is tax determined on the basis of the regular assessment . This expression also finds place in sub-section (5), which provides for the payment of simple interest to the assessee on the amount of advance tax paid by him and such interest is made payable from the date of payment to the date of the provisional assessment made under section 23B, or, if no such assessment has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34, which decided cases have held to be nothing more than a procedural provision and not a charging provision, requires that in a case where the assessee has failed to submit a return, a notice has to issue to the assessee. Such notice has to contain all or any of the requirements which may be included in a notice under section 22(2). The section further states that on the issue of such a notice the provisions of this Act shall so far as may be apply accordingly as if the notice were a notice issued under that sub-section. Turning now to section 22 of the Act, it provides for the issue of notices calling for returns of income. Section 22(1) provides for the issue of a general notice by publication. Every person whose total income during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34(1)(a) authorises the Income-tax Officer to assess or reassess such income, profits or gains..........In those cases, where no return has been made by the assessee, there can be an assessment under section 23 after the issue of a special notice under section 22(2) of the Act during the year of assessment. If that cannot be done, there can be an assessment by the issue of a notice analogous to one under section 22(2) of the Act in proceedings started under section 34 of the Act. In either event it seems to us to be nothing more than a regular assessment in the sense that it is the initial assessment that is made upon the assessee and not a case where an assessment which had once been made is reopened and the income subjected to reassessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment made under section 34 of the Act. His contention was negatived by the trial judge and the matter came on appeal before a Bench. The learned judges had to decide the matter on first principles, there being no direct authority upon the question. In the case before them, it appeared that at the time the assessment was originally made under section 23 of the Act, the Income-tax Officer had purported to apply section 18A(6) and to have charged penal interest on the ground that the assessee's estimate of the advance tax payable was less than 80 per cent. of the tax computed to be due on the assessment being made under section 23. There had in fact been an application of the power conferred upon the Income-tax Officer under section 18A(6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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