M RM M M N NATARAJAN CHETTIAR Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THESE appeals under the Letters Patent are from the judgment of Panchapakesa Ayyar, J., disposing of W. P. Nos. 864 to 869 of 1957. A common question of law arises in these appeals. The appellant was an assessee on the file of the Income-tax Officer, III Additional Circle, Karaikudi. The assessments on the appellant for the years 1947-48 to 1952-53 were originally completed on different dates, which it is not material to mention, on particular total incomes. THESE assessments were made under section 23(3) of the Income Tax Act, 1922. Subsequently, the Income-tax Officer reopened the assessments under section 34 of the Act and recomputed the appellant's total incomes for the different years at figures, which were in excess of the original figures. There is no dispute as regards this reopening and reassessment under section 34 of the Act.

(2.) BUT, in the demands based on the reassessment dated February 28, 1957, the Income-tax Officer included certain sums as interest payable under section 18A(6) of the Act. The appellant took exception to this charge of interest. At the same time he applied to the Inspecting Assistant Commissioner, Madurai Range, to get relief under the proviso to section 18A(6), which runs thus "Provided further that in such cases and under such circumstances as may be prescribed, the Income-tax Officer may reduce or waive the interest payable by the assessee." Rule 48 is the material rule. This application was, however, rejected. Thereupon the appellant filed the writ petitions out of which these appeals arise for the issue of writs of certiorari or such other appropriate rules or orders to quash the imposition of the penal interest as per the said reassessment orders. The main contention raised on behalf of the appellant in his writ petitions was that section 18A(6) of the Act will not in terms apply to an assessment made under section 34 of the Act. The learned judge held against this contention. There was also another contention raised before him that the Assistant Commissioner of Income-tax before whom an application had been filed to reduce or waive the interest levied on the appellant had not properly disposed of the application, because he had not assigned any reasons for declining to exercise his discretion in favour of the appellant.

(3.) THERE is difference between an assessment not being a regular assessment and an assessment being an irregular assessment Neither learned counsel for the assessee, nor learned counsel for the Department, has been able to bring to our notice any direct authority on the question, which falls to be decided in these appeals. Mr. Srinivasan relied upon what he called the definition in the statute itself of a regular assessment in sub-section (5) of section 18A. That sub-section runs thusThe Central Government shall pay simple interest--(i) at two per cent. per annum on any amount payable in accordance with the provisions of this section before the first day of April, 1955, and paid accordingly (ii) at four per cent. per annum on any amount payable in accordance with the provisions of this section after the 1st day of April, 1955, and paid accordingly from the date of payment to the date of the provisional assessment made under section 23B, or if no such assessment has been made to the date of the assessment (hereinafter called the 'regular assessment') made under section 23 of the income, profits and gains of the previous year for an assessment for the year next following the year in which the amount was payable." The " regular assessment " therefore, which occurs in the next sub-section, i.e., sub-section (6), must bear the same meaning, namely, "an assessment made under section 23 of the income . . . " etc Learned counsel for the Department met this argument in two ways : (1) by pointing out that the expression " regular assessment " in sub-section (5) of section 18A must be understood in the context as distinct from the provisional assessment made under section 23B. (2) By contending that reassessment under section 34 of the Act, or even an assessment for the first time under section 34 of the Act, would also be an assessment under section 23 of the Act. He relied upon the ruling of this court in Govindarajulu Iyer v. Commissioner of Income-tax. That decision, however, did not directly deal with this point. That related to the power of the Income-tax Officer to levy a penalty under section 28(1)(a) for failure without reasonable cause to furnish a return pursuant to the general notice under section 22(1) of the Act in proceedings taken under section 34 of the Act.