TMI Blog1961 (9) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 6,000 was imposed on this dissolved firm under section 28(1)(c) of the Income-tax Act. It appears that the amount of penalty was not paid and, in consequence, by order dated November 12, 1951, a penalty of ₹ 600 was imposed under section 46(1) for non-payment of the penalty of ₹ 6,000 imposed under section 28(1)(c). The petitioner has made a grievance of the imposition of the two amounts of penalty, viz., ₹ 6,000 and ₹ 600, on the grounds (1) that penalty under section 28(1)(c) could not be imposed on a dissolved firm and (2) that penalty, in default of payment of penalty, could not be imposed under section 46(1) of the Income-tax Act. So far as the imposition of penalty of ₹ 6,000 under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty for imposition of penalty for such default. 3. Imposition of penalty for default in payment of penalty is not a mode of recovery, because section 46(1) does not deal with a mode of recovery at all. So far as the first ground is concerned, that seems to be no longer available to the petitioner in view of the decision of the Supreme Court already referred to above. In that decision, it has been laid down at page 430 as follows: By section 28, the liability to pay additional tax which is designated penalty is imposed in view of the dishonest and contumacious conduct of the assessee. It is true that this liability arises only if the Income-tax Officer is satisfied about the existence of the conditions which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re concerned in that case was whether arrest for recovery of arrears of income-tax was a mode of recovery of the arrears of tax or it was a punishment for failure to pay tax. In answer to that question, at page 131 of the report, their Lordships observed as follows: When dues in the shape of money are to be realized by the process of law and not by voluntary payment, the element of coercion in varying degrees must necessarily be found at all stages in the mode of recovery of the money due. The coercive element, perhaps in its severest form, is the act of st in order to make the defaulter pay his dues. In the result, their Lordships held that where an arrest is made under the provisions for recovery of public dues, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statute is designed to be workable, and the interpretation thereof by a court should be to secure that object, unless crucial omission or clear direction makes that end unattainable. From these observations it follows that section 46 should receive a liberal interpretation. On the decision of the Supreme Court already cited, it would be in consonance with the principle of interpretation, as laid down in the two English cases, that the word tax in section 46(1) should include additional tax, which a penalty under section 28(1)(c) really is. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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