INCOME TAX OFFICER, DISTT. LL(II), KANPUR AND OTHERS vs. SHRI MANI RAM ETC.

CIVIL APPEAL No. 314/1966Supreme Court[1969] 1 S.C.R. 72420 August 1968Bench: 3 JudgesAuthor: J.C. SHAH, V. RAMASWAMI, A.N. GROVER11 pages
AI SummaryDismissed

What did the Supreme Court hold?

The appeals must be dismissed. The Supreme Court held that the expression 'assessed' in Section 18A(3) of the Indian Income Tax Act, 1922, is not confined to regular assessment but includes any type of assessment, including a provisional assessment under Section 23B. The Court reasoned that even a provisional assessment involves a determination of total income, albeit with less scrutiny than a regular assessment. The Court noted that Section 18A(1) uses 'assessed' without qualification, and Section 18A(5) expressly mentions both 'provisional assessment' and 'regular assessment', indicating that 'assessed' in Section 18A(3) should be read in its ordinary sense to encompass all forms of assessment. The Court rejected the argument that the provisions of the Income Tax Act, 1961, could be used to interpret the earlier Act, stating that a subsequent Act generally offers no useful guide to the meaning of a prior Act unless the earlier provision is ambiguous and both Acts deal with the same subject matter, which was not the case here. Therefore, the judgment of the High Court was upheld.

What were the facts?

The respondents filed returns for assessment year 1953-54, and were provisionally assessed on October 14, 1954, with regular assessment on February 27, 1958. For the subsequent four years, regular assessments were made after February 27, 1958. As the respondents did not submit estimates of tax payable or pay advance tax as required by Section 18A of the Indian Income Tax Act, 1922, the Income Tax Officer levied interest under Section 18A(8) and imposed penalties under Section 18A(9)(b) read with Section 28. Appeals to the Appellate Assistant Commissioner and revisions to the Commissioner were dismissed. The respondents then filed writ petitions in the High Court, which quashed the orders, holding that Section 18A(3) did not apply due to a provisional assessment under Section 23B in 1954. The Revenue appealed to the Supreme Court.

What were the issues?

1. Whether the expression 'any person who has not hitherto been assessed' in Section 18A(3) of the Indian Income Tax Act, 1922, after the Income Tax Amendment Act 67 of 1949, includes a person who has only been provisionally assessed under Section 23B of the Act? (Question of law) Assessee's contention: The High Court correctly held that Section 18A(3) did not apply as there had been a provisional assessment under Section 23B. Revenue's contention: The expression 'assessed' in Section 18A(3) should be interpreted to include only a 'regular assessment' under Section 23 of the Act. They also argued that the language of Sections 210 and 212(3) of the Income Tax Act, 1961, indicated a Parliamentary exposition of Section 18A(3) of the earlier Act as referring only to regular assessments.

Which sections of the Income-tax Act were involved?

Section 18A(3),Section 23B,Section 18A(8),Section 18A(9)(b),Section 28,Section 23,Section 18A(1),Section 18A(5),Section 210,Section 212(3)

AI-generated summary — verify with the full judgment below

724 INCOME TAX OFFICER, DISTT. ll(it"), KANPUR AND A OTHERS v. SHRI MANI RAM ETC.

Aul(ust 20. 1968 (J. C. SHAH, V. RAMASWAMI A:-ID A. N. GROVER, JJ.)

Indian Income.tax Act 1922, s. 18A(3)-Word 'assesnd' in section whether confined to regular assessment or include> provisional ass..s- ment-Relevance o/ corresponding provision in Indian Income Tax Act 1961 for construing earlier Act. B The respondents filed returns for the year 1953-54 and they were C provisionally assessed on 14-I0-1954. and regular assessment was made on 27-2-58. For the next four succeeding years the respondents filed returns, and for all the years the regular assessments under s. 23 of the Income Tax Act, 1922 were made after 27-2-58. Since no .,.timate r/f the tax payable on their income as required by s. 18A was sent noc the tax in advance paid, the Income Tax Officer while assessing them under s. 23 held that they were liable to pay interest under s. 18A(8) and in addition he applied the provisions of s. 18A(9)(b) and imposed a D penalty for each year of assessment by virtue of s. 28 read with s. 18A(9) (b). The respondents preferred appeals to the Appellate Assis- tant Co

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