Pathak, J. - (1.) THE petitioner challenges the imposition and collection of penalties for the omission to pay advance tax demanded for the financial year 1968-69.
(2.) THE petitioner is a proprietor of the Naaz Cinema, Jawahar Square, Allahabad. She had been previously assessed to income-tax by the Income-tax Officer, B-Ward, Allahabad. On August 6, 1968, the Income-tax Officer served a notice of demand under Section 156 of the Income-tax Act, 1961, requiring the petitioner to pay Rs. 11,292 in instalments during the financial year 1968-69 as advance tax under Section 210 of the Act. It appears that the petitioner omitted to pay the advance tax. She says that she was preoccupied with the marriage of her daughter. She also claimed that she would have filed a revised estimate inasmuch as the income during the financial year 1968-69 was low, and this was evidenced subsequently by the assessment order for the assessment year 1969-70 whereby the total income was computed at Rs. 18,444 on which the tax liability came to Rs. 2,143 only. On January 10, 1969, the Income-tax Officer, Collection, Allahabad, made an order imposing a penalty of Rs. 1,280 under Section 221(1) of the Act because of the failure of the petitioner to pay the first and second instalments due on September 1, 1968, and December 1, 1968, respectively. Against this penalty order the petitioner appealed to the Appellate Assistant Commissioner, but, on July 29, 1969, the appeal was dismissed. Meanwhile, by an order dated February 27, 1969, the Income-tax Officer imposed a further penalty of Rs. 1,500 under Section 221(1) on account of the continuing default of the petitioner in omitting to pay the two instalments. A third penalty in the sum of Rs. 2,260 was imposed by the Income-tax Officer by his order dated March 31, 1969, on account of the default of the assessee in failing to pay the amount of advance tax demanded. THE petitioner applied in revision to the Commissioner of Income-tax under Section 264(1) of the Act against the order of the Appellate Assistant Commissioner concerning the first penalty order and also directly against the second and third penalty orders. THE Additional Commissioner of Income-tax, Lucknow, has by his order dated August 3, 1970, dismissed the revision applications. The first contention of the petitioner is that Section 221 does not come into play because it is concerned only with a default in making a payment of tax and, it is said, advance tax is not a "tax" for the purposes of Section 221. Now "tax" has been defined by Section 2(43) of the Act in the following terms : "(43) 'Tax', in relation to the assessment year commencing on the 1st day of April, 1965, and any subsequent assessment year, means income-tax chargeable under the provisions of this Act..." Income-tax is chargeable under Section 4(1), which provides : "4. Charge of income-tax.--(1) Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year or previous years, as the case may be, of every person :...."
(3.) THEN follows Section 4(2), which declares : "(2) In respect of income chargeable under Sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act." The provisions of the Act which deal with advance payment of income-tax chargeable under Section 4(1) are contained in Sections 207 to 219. Section 207(1) provides that tax shall be payable in advance in accordance with the provisions of Sections 208 to 219 in the case of income other than the income chargeable under the head "Capital gains". Although the expression "tax" is used here, it is income-tax to which reference is intended. Ordinarily, income-tax is payable upon the passing of an assessment order and a demand being made. The scheme embodied in Sections 207 to 219 contemplates an advance payment of income-tax, that is to say, before the assessment order has been passed and the liability to pay income-fax has arisen. It is income-tax paid in advance. That is also amply clear from Section 190, which declares : "190. Deduction at source and advance payment.--(1) Notwithstanding that the regular assessment in respect of any income is to be made in a later assessment year, the tax on such income shall be payable by deduction at source or by advance payment, as the case may be, in accordance with the provisions of this Chapter. (2) Nothing in this section shall prejudice the charge of tax on such income under the provisions of Sub-section (1) of Section 4." ;