9911796707
TMI Blog1972 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... also contended that he had the option of getting the amount of Rs. 72,515 taxed at the average rate applicable to the total income for three years preceding the assessment year 1956-57. The Appellate Assistant Commissioner, however, rejected those contentions and confirmed the assessment order. There was a further appeal to the Tribunal, and the Tribunal held that the addition of the said two sums made by the Income-tax Officer was invalid and, therefore, deleted the same from assessment. The said decision of the Tribunal was also confirmed by this court on September 1, 1966, in T.C. No. 244 of 1965. Thus, the two sums referred to above came to be deleted from the total income of the assessee and the total income was actually determined at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect the refund of a sum of Rs. 4,740 levied and collected as penalty. The respondent, however, contends that the retention of the penalty of Rs. 4,740 which is equal to the tax ultimately determined as payable by the petitioner is in accordance with the proviso to section 3(1)(c) of the said Central Act 11 of 1964. The question, therefore, involves the scope and interpretation of the said proviso. Section 3 of Central Act 11 of 1964, so far as it is relevant for the present case, is as follows : 3. Continuation and validation of certain proceedings.--(1) Where any notice of demand in respect of any Government dues is served upon an assessee by a taxing authority under any scheduled Act, and any appeal or other proceeding is filed or take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer v. Seghu Buchiah Setty wherein it has been held while considering the scope of sections 29 and 45 of the Indian Income-tax Act, 1922, that when a demand levied by the Income-tax, Officer as a result of an assessment is varied by an appellate or revisional authority, the original order of the Income-tax Officer merges into the order of such authority and consequently in all cases where the appellate or revisional order varies the assessment, the original order goes and all steps already taken for the recovery of the demand became null and void and that, in such cases, it is the duty of the Income-tax Officer to issue fresh notice of demand in the prescribed form and serve it up on the assessee. The Act, therefore, provides under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n reduced as a result of the final order to Rs. 4,740. But by the time the final order quantifying the actual tax payable came to be passed, the penalty of a sum of Rs. 11,000 had been collected from the petitioner. In terms of the proviso referred to above, the petitioner is entitled to the refund of such penalty as exceeds the amount of tax ultimately levied. The petitioner in this case, however, claims that the entire sum of Rs. 11,000 levied as penalty should be refunded. According to the petitioner there was in fact no justification for levying the penalty at all as no default has occurred on the respective dates when the orders of penalty were passed. It is pointed out that the penalty orders were passed on March 29, 1958, October 7, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the penalty orders, the only remedy open to him is under the proviso which says that the amount of penalty exceeding the tax as reduced will have to be refunded to the assessee. The word "thereof" occurring in the proviso refers only to the amount of tax as original assessed in respect of which penalty has been imposed. This is sufficient to repel the contention of the petitioner that the penalty if at all that could be collected from him should be for non-payment of the tax ultimately assessed. The petitioner also refers to the provision in section 221(2) of the Income-tax Act, 1961, which provides that where as a result of any final order the amount of tax, with respect to the default in the payment of which the penalty was levied, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt ; there is no equity about a tax : there is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. " Here section 3(1)(c) specifically validates the penalty orders notwithstanding that the amount of tax for non-payment of which penalty has been levied has been reduced in the final order. When the statute has specifically validated the penalty levied earlier it is not open to the petitioner to invoke equitable considerations and question the validity of the orders of penalty. In our view the respondent was justified in holding that the petitioner is not entitled to the refund of the entirety of Rs. 11,000 levied as penalty. Thus the writ petitions have no merits and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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