- (1.) THIS writ petition, under article 226 of the Constitution, is directed against the orders of the Income tax Officer dated the 22nd January, 1962, imposing penalties of Rs. 917 and 5,897 under section 46(I) of the Income tax Act (hereinafter referred to as the Act) and for failure to consider or pass any order on the application of the assessee dated 30th December, 1961, made under section 45 of the Act.
(2.) THE facts leading up to this petition are these. THE assessee company was incorporated on the 29th May, 1941. It carried on the business of publishing and printing at Aligarh with branches at other places. THE company was assessed for the first time to income-tax and excess profits tax for the assessment year 1942-43 and the relevant chargeable accounting period. THE assessee continued to make advance payments of tax and assessments continued to be made from assessment years 1942-43 to 1954-55 and according to the assessee the amounts refundable to the petitioner up to the assessment year 1954-55 worked out to Rs. 91,368.62 nP. THE total loss to be carried forward from the year 1953 to the following year amounted to Rs. 51,745. For the assessment year 1954-55 the Income tax Officer determined the income of the petitioner at Rs. 17,321 where the petitioner had returned a loss of Rs. 18,353. THE Income tax Officer for the assessment year 1954-55 allowed a set off of the loss of Rs. 34,833 of the assessment year 1953-54, as computed by the Income tax Officer, and he determined the loss to be carried forward to the following year at Rs. 17,502. The assessee filed an appeal against the assessment order for 1954-55 to the Appellate Assistant Commissioner (hereinafter referred to as the Appellate Assistant Commissioner) who by an order dated 21st March, 1960, set aside the assessment order for making a fresh assessment. Although two years have elapsed since this order was passed, the Income tax Officer has not cared to proceed in the matter. The assessee for the assessment year 1954-55 has paid a sum of Rs. 20,287-10-6 under section 18A(I) of the Act. When the Income tax Officer made under regular assessment this sum was given credit under the provisions of section 18A(II) of the Act. This assessment was set aside in appeal by the Appellate Assistant Commissioner but the amount having once been given credit for in the regular assessment made on March 31, 1959, the assessee claimed that it was entitled to the refund. In any event it was contended that the department cannot blow hot and cold in the same breath by invoking the provisions of section 18A(5) and depriving the assessee interest on the said advance payment on the ground that the regular assessment was made on the 31st March, 1959, and yet not refunding the advance which had been deposited.
(3.) IN the first relevant assessment year 1955-56 the assessee had filed a return showing a loss of Rs. 37,218. The INcome-tax Officer estimated the assessees income at Rs. 1,01,683 by an assessment order dated 30th March, 1960. Against the income so determined the INcome tax Officer only set off Rs. 17,502, which was the loss carried forward according the assessment order for 1954-55 and levied tax on a net income of Rs. 84,181 and the tax of Rs. 42,709.27 nP. was demanded by a notice of demand dated 30th March, 1960, requiring payment by 30th April, 1960. The petitioner filed an appeal against the said assessment order to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner was not satisfied as to the basis for the large additions made to the income returned and he, therefore, called for a remand report from the Income tax Officer by his order, dated 30th November 1961, within three months of the receipt of the order. No such remand report has been submitted up to this day. For the next relevant assessment year 1956-57, the petitioner had similarly declared a loss of Rs. 47,569 but the Income tax Officer assessed the assessee on an income of Rs. 1,53,879, by an assessment order, dated the 30th March, 1961, and demanded a tax of Rs. 1,06,527.30 nP. by a notice of demand of the same date requiring payment by the 15th April, 1961. An appeal against the said order was filed to the Appellate Assistant Commissioner on grounds more or less similar to those taken against the 1955-56 assessment order in respect of which the Appellate Assistant Commissioner was already observed, had called for a remand report. By two applications, one under section 35 and the other under section 45, the assessee had asked for a recalculation of the refunds due and also that he should not be treated as an assessee in default, in view of the fact that the appeals for 1955-56 and 1956-57 under section 30 were pending before the Appellate Assistant Commissioner. The assessee continued to make efforts to get the Income tax Officer to make the necessary revisions and refunds and to dispose of its application under section 35 of the Act but without any substantial result. The petitioner finally sent an application dated 30th December, 1961, giving details of the refunds due and also another application under section 45 requiring the opposite party to exercise his discretion under section 45 of the Act in respect of the demands for the assessment year 1955-56 and 1956-57. The Income tax Officer sent a reply dated 10th January, 1962. Though this reply mentions "applications" but the tenor of the reply indicates that the question of exercising discretion, under the proviso to section 45, was never considered by him. The representative of the assessee saw the Income tax Officer on the 20th January, 1962, and pointed out several discrepancies in the records regarding the demands made and the refunds due. The representatives against met the Income tax Officer on the 22nd January, 1962, and on being required by the Income tax Officer he undertook to send a year wise statement of demands and payments for the entire period from 1942-43 to 1954-55. The Income-tax Officer, however, had earlier called upon the assessee, by his letter dated 10th January 1962, to pay by monthly instalments of Rs. 30,000, Rs. 20,000 and the balance, if any, by the 15th March, 1962 without passing any order on the assessees application dated 30th December, 1961, under section 45 of the Act. The Income tax Officer on the very day when he had asked the representative to file the statement passed two orders under section 46(I) of the Act 22nd January, 1962 levying penalties of Rs. 917 and Rs. 5,897 for the assessment years 1955-56 and 1956-57 respectively. The assessee was called upon to pay the penalties by the 29th January, 1962, failing which further penalty was threatened under section 46(IA) of the Act. The said penalties were imposed, without issuing any notice to show cause on the petitioner. It is in these circumstances that the present writ petition has been filed. ;