COMMISSIONER OF INCOME TAX DELHI Vs. S TEJA SINGH

JUDGEMENT

(1.) This is an appeal against the judgment of the High Court of Punjab in a reference under S. 66 (1) of the Indian Income-tax Act, 1922, hereinafter referred to as the Act.

(2.) The facts are that the respondent had not been assessed to income-tax prior to the assessment year 1948-49. On July 4, 1949, he made 'suo- motu' returns showing an income of Rs. 4,494 for the accounting year 1947-48 being the previous year for the assessment year 1948-49 and an income of Rs. 31,646 for the accounting year 1948-49 being the previous year for the assessment year 1949-50. By orders dated August 25, 1949, the Income-tax Officer assessed the income for the assessment year 1948-49 at Rs. 6,277 and for the assessment year 194950 at Rs. 36,281. The correctness of these orders is not in question before us. We are concerned in these proceedings with the vires of an order, which the Income-tax Officer made on October 9, 1950, under S. 28 read with Ss. 18-A (3) and 18-A (9) of the Act. It will be convenient to set out these provisions, so far as they are material for the purpose of this appeal. Section 18-A (3) provides that.

(3.) The Income-tax Officer held that as the respondent had failed to send an estimate of the tax on his income as provided in S. 18-A (3) he became liable to be proceeded against under S. 28, and accordingly imposed a penalty of Rs. 40 for the year 1948-49 and Rs. 1,000 for the year 1949-50. On appeal, the Appellate Assistant Commissioner confirmed the order in so as it imposed a penalty for the year 1948-49 but set it aside as regards the year 1949-50 on the ground that by reason of the assessment for the year 1948-49 the respondent ceased to be a new assessee for 1949-50, and that, in consequence, S. 18-A (3) had no application. Against the order cancelling the penalty for 1949-50, the Income-tax Officer preferred an appeal to the Appellate Tribunal, which disagreed with the view of the Appellate Assistant Commissioner that the respondent was no longer a new assessee within S. 18-A (8) of the Act, but held that the order of the Income-tax Officer imposing a penalty under S. 28 was ultra vires, because that section would, in terms, apply only when a person failed to furnish the return when he was required so to do by notice under S. 22 or S. 34 of the Act, an that there could be no such notices with reference to estimates of tax on income to be sent under S. 18-A (3). In the result, the appeal was dismissed. On the application of the appellant, the Tribunal referred the following question for the opinion of the High Court: