B F VARGHESE Vs. CAIT TRIVANDRUM
HIGH COURT OF KERALA
B. F. VARGHESE
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(1.) This is a reference made by the Kerala Agricultural Income Tax Appellate Tribunal under S.60(3) of the Agricultural Income Tax Act, 1950 as directed by this Court on the application of the assessee. The question referred is:-
"Whether on the facts and in the circumstances of the case the imposition of a penalty of Rs. l.000/ for default in the payment of the tax assessed for the year 1961-62 as per the assessment order of the Agricultural Income Tax Officer dated 21-1-1965 which was set aside in appeal by the Appellate Assistant Commissioner can be sustained."
(2.) The assessee was assessed to agricultural income tax for the year 1961-62 by the Agricultural Income Tax Officer as per his order dated 22-1-1965. He filed an application under S.40 of the Act not to treat him as a defaulter in respect of the tax demanded as per the assessment, pending the disposal of an appeal which he had filed before the Appellate Assistant Commissioner. The Income Tax Officer rejected this application, and allowed the assessee to remit the tax in two instalments. The first instalment was payable on 18-3-1965 and the second, instalment was payable on 20-3-1965. The assessee failed to pay them; and therefore the Income Tax Officer by his order dated 1-4-1965 imposed a penalty of Rs. l,500/- on the assessee. The assessee filed an appeal from this order before the Appellate Assistant Commissioner, who by his order dated 15-5-1965 dismissed the appeal, but reduced the penalty to Rs. 1,000/-. In the meanwhile, the Appellate Assistant Commissioner had by his order dated 19-4-1965 allowed the appeal which the assessee had field from the order of assessment, and remitted the case to the Income Tax officer reassessment in the light of the directions contained in his order.
(3.) It is now well settled by the decision of the Supreme Court in Income tax Officer v. Seghu Buchiah Setty ( 1964 (52) ITR 538 ) that when an order of assessment is set aside in appeal, an order imposing penalty for non payment of tax demanded pursuant to the said order of assessment falls to the ground. This point was not taken before the Appellate Assistant Commissioner; and he also did not notice it. The assessee filed a further appeal before the Appellate Tribunal, before whom also the above point was not taken. The Appellate Tribunal dismissed the appeal.;
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