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TMI Blog1962 (8) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... d, and to make a further assessment. The Income-tax Officer made a fresh assessment on 7th March, 1958. He held that the business belonged to the assessee and not to her husband and computed the total income as Rs. 47,586 and levied a tax of Rs. 14,749.93. The officer also levied penal interest of Rs. 4,669.06 on the assessee under section 18A(8) of the Act. This order was challenged by the assessee by preferring an appeal to the Appellate Assistant Commissioner. One of the grounds urged in the appeal by the assessee related to the levy of penal interest. It was contended that the Income-tax Officer failed to exercise the discretion vested in him under rule 48 of the Income-tax Rules to reduce or waive the penal interest leviable. The assessment proceedings were spread over a number of years from 1953 to 1958, and it was the assessee's contention that she should not be mulcted with penal interest for the period of the pendency of the proceedings as it cannot be said that she was in any way responsible for such pendency. The appellate authority considered that the case was a fit one where relief under rule 48 could be given to the assessee. He, accordingly, disposed of the appeal gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous year for an assessment for the year next following is less than the income on, which he is required to pay tax and accordingly wishes to pay an amount less than the amount which he is so required to pay, he may send to the Income-tax Officer an estimate of the tax payable by him calculated in the manner laid down in sub-section (1)...... and shall pay such amount as accords with his estimate in equal iastalments on such of the dates specified in sub-section (1) ..... 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 year 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...... 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...... by instalments ...... 18A. (6) Where in any year an assessee has paid tax under sub-section (2) or sub-section (3) on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r after the submission of the return, the delay in assessment not being attributable to the assessee. (2) Where a person is under section 43 deemed to be an agent of another person and is assessed upon the latter's income. (3) Where the assessee has income from an unregistered firm to which the provisions of clause (b) of sub-section (5) of section 23 are applied. (4) Where the 'previous year' is the financial year or any year ending about the close of the financial year and large profits are made after the 15th of March, in the circumstances which could not be foreseen. (5) Any case in which the Inspecting Assistant Commissioner considers that the circumstances are such that a reduction or waiver of the interest payable under section 18A(6) is justified." The scheme, under section 18A, of payment of advance tax is fairly clear. The Income-tax Officer may call upon the assessee to pay advance tax quarterly, from 15th day of June of each assessment year, on the basis of the commencing assessment of the latest previous year, relating to the assessee. But the assessee is clothed with the right to offer his estimate of the income for the relevant period and pay advance tax on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets of cases in sub-sections (6) and (8). We have, therefore, to examine the terms of sub-section (8) closely to ascertain the true intention of the legislature--Whether it had in view the conferment of the benefit of the fifth proviso of sub-section (6) to the assessee failing under sub-section (8). Now, sub-section (8) makes the assessee liable to pay "interest, calculated in the manner laid down in sub-section (6)". The discretion of the Income-tax Officer to reduce or waive interest payable by an assessee under such circumstances as may be prescribed is not a component of calculation, nor is it a feature of the manner of computation of interest. The quantum of the interest liability must be fixed by the officer before he can apply his mind to the question of reduction or waiver. It would be strange to hold that-idea of reduction or waiver can be entertained as part of the process of determination of interest. We are unable to agree with the contention urged on behalf of the assessee that the manner of calculation of interest as laid down in sub-section (6) takes in its fold the discretion of the Income-tax Officer to reduce or waive interest in an appropriate case. Mr. K. Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to refer in express and explicit terms to the manner of calculating interest laid down 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 manner 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)." Dealing with the contention based upon the language of rule 48, the learned chief Justice observes thus at page 536 : Reference to section 18A in that rule cannot be read as if a rule was being laid down as applicable to all the provisions of section 18A. It must be read in the context of the language of sub-section (6) and particularly the fifth proviso to that sub-section. It is, true that the rules are statutory rules and made by the Central Board of Revenue. But we are not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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