RAJAGOPALAN, J. - (1.) THESE petitions arose out of proceedings under the Income-tax Act for the assessment years 1946-47 and 1948-49 the corresponding account years ended respectively with 31st March, 1946, and 31st March, 1948. The assessee was a Hindu undivided family, of which M. K. Ramaswami Aiyar was the karta. He died on 4th June, 1949. The petitioner is the present karta of that family Ramaswami Aiyar, as the karta of his undivided Hindu family, was a partner of the Madura Knitting Company, and the share of profits derived from this business constituted the principal source of income of this undivided family. The assessment of the assessee could therefore be completed only after his share of the profits of the company had been ascertained. Further, when the assessment of the company was revised on appeal or on a reference under section 66(1) of the Act, the share of the assessee would become liable to a corresponding revision
(2.) THE assessee became liable to pay tax in advance under the provisions of section 18A of the Act, notices having been issued to him under sub-section (1) of section 18A in each of the years with which we are concerned in these proceedings. Ramaswami Aiyar purported to avail himself of the right conferred on an assessee by sub-section (2) of section 18A. With reference to the assessment year 1946-47 he lodged a revised estimate of his income on 15th March, 1946. It was mistakenly assumed at one stage that it was only lodged on 20th March, 1946. He estimated the income for the relevant account year at Rs. 45, 000. For the assessment year 1948-49 he estimated his income, again at Rs. 45, 000. That estimate was furnished on 15th March, 1948. THE actual income on which the assessee was finally assessed in each of the assessment years exceeded these estimates by very much more than the tolerance permitted by sub-section (6) of section 18A, the difference being much more pronounced in the assessment year 1948-49 than in 1946-47. THE assessee, therefore, became liable to pay interest under the provisions of sub-section (6) of section 18ATHE assessment of the assessee for 1946-47 was completed by the Income-tax Officer on 28th November, 1950, and that for 1948-49, on 28th February, 1951, both the assessments being completed after the death of Ramaswami Aiyar. For both the years, the sum demanded included the interest due to the State under sub-section (6) of section 18A. THE assessable income of the Madura Knitting Company underwent alteration by way of reduction when appeals for the assessment were disposed of by the Tribunal, and as a necessary consequence the assessable income of the assessee also was revised. Acting under the powers contained in the third proviso to section 18A(6), the claim under the head "interest" under sub-section (6) was also revised by the Income-tax Officer, and a fresh demand was made therefor on 12th April, 1954. Apparently, the petitioner had meanwhile applied to the Income-tax Officer himself to cancel the levy of interest under section 18A(6). THE averment in paragraph 7 of the affidavit filed by the petitioner in Writ Petition No. 743 of 1954 was "THE petitioner therefore requested the first respondent (Income-tax Officer) ... that the levy of penal interest ... was clearly illegal ... and invited him to cancel the same under the powers vested in him under the rules. On the refusal of the first respondent to this request, the petitioner filed a petition on 10th April, 1954, to the Inspecting Assistant Commissioner ... to cancel the levy of penal interest under the powers vested in him under rule 20 of the Indian Income-tax Act" * The truth of the claim of the petitioner, that he had moved the Income-tax Officer in the first instance to cancel the levy of "penal" interest, was not challenged by the respondent. The date, 10th April, 1954, would, however, appear to be wrong. It was on 14th April, 1954, that the petitioner applied to the Inspecting Assistant Commissioner to direct a cancellation of the levy of interest. That application failed. The Central Board of Revenue declined to interfereThe petitioner applied under article 226 of the Constitution for the issue of writs of certiorari to set aside the orders of the Income-tax Officer levying interest under section 18A(6) in each of the two years. Writ Petition No. 743 of 1954 related to the assessment year 1948-49, and Writ Petition No. 748 of 1954 related to the assessment year 1946-47
(3.) WE shall first set out the relevant portions of section 18A of the Act. The relevant portion of sub-section (1)(a) of section 18A runs;