TMI Blog1978 (9) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... the Super Profits Tax Act, 1963 ?" The assessment in question is one made under the Super Profits Tax Act, 1963 (hereinafter referred to as "the Act"). The assessee is M/s. Soma Sundarams (Private) Ltd., and the assessment year is 1963-64, the chargeable accounting period being the year ending April 18, 1963. The total income determined for the income-tax assessment for this year was Rs. 3,48,092. After making necessary adjustments required under the First Schedule to the Act, including the deduction of Rs. 1,74,046 for income-tax and super-tax payable in respect of the total income, the ITO determined the chargeable profits under the Act at Rs. 89,237 as against deficiency of Rs. 41,909 claimed in the return by the assessee. The ITO rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are not defined in it and defined in the I.T. Act shall have the meaning respectively assigned to them in the I.T. Act. The First Schedule to the Act contains the rules for computing the chargeable profits. In computing the chargeable profits of a previous year, the total income computed for that year under the I.T. Act has to be adjusted as follows: First, under r. 1 of the First Schedule, income, profits and gains and other sums falling within the several clauses of that rule, have to be excluded from such total income and, secondly, the balance of the total income arrived at after making the exclusions mentioned in r. 1, has to be reduced by the amounts mentioned in the several clauses in r. 2 thereof. The net amount of income cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc.--(1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person-- (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-section (1) of section 139 or by notice given under sub-section (2) of section 139 or section 148 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by sub-section (1) of section 139 or by such notice, as the case may be, or ...... he may direct that such person shall pay by way of penalty,-- (i) in the cases referred to in clause (a), in addition to the amount of the tax, if any, payable by him, a sum equal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing penal in nature or being merely meant for imposition of an additional tax, the liability to pay such tax having been designated as penalty under s. 28. One line of argument which has prevailed particularly with the Allahabad High Court in Lal Chand Gopal Das's case [1963] 48 ITR 324 is that there was no essential difference between tax and penalty because the liability for payment of both was imposed as a part of the machinery of assessment and the penalty was merely an additional tax imposed in certain circumstances on account of the assessee's conduct. The justification of this view was founded on certain observations in C. A. Abraham v. Income-tax Officer [1961] 41 ITR 425 (SC). It is true that penalty proceedings under s. 28 are inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the charging provision of that Act, i.e., s. 4 of the I.T. Act, alone can be called income-tax. Interest, penalties and fines, which are also payable under the other provisions of that Act cannot be termed as income-tax. They are imposed in addition to income-tax for the purpose of enforcing the levy of income-tax. This is clear from the decision of the Supreme Court in Bhor Industries Ltd. v. CIT [1961] 42 ITR 57. In that case, the Supreme Court, while considering the question whether in making an order under s. 23A of the Indian I.T. Act, 1922, in respect of the profits and gains of a company, the assessable income of the previous year should be reduced not only by the amount of income-tax and super-tax payable by the company in respect t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble in consequence of any order passed under this Act, the Income-tax Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable." It was, however, argued by Sri Swaminathan that the object of the Act being realisation of higher amount by way of tax when there were large profits, the court should allow deduction of all outgoings such as interest and penalties payable by the assessee-company while determining the chargeable profits by placing a wider construction on the expression "income-tax" appearing in r. 2(i) of the First Schedule to the Act. We feel that the said expression does not lend itself to such a construction at all. When the language of a statute is clear, it is not open to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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