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Amargundappa Arali Oil Miller, Gangavti Vs. Commissioner of Income-tax in Mysore, Bangalore and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKarnataka High Court
Decided On
Case NumberWrit Petn. No. 415 of 1958
Judge
Reported inAIR1962Kant70; AIR1962Mys70
ActsFinance Act, 1950 - Sections 13(1); Hyderabad Income-tax Act - Sections 58
AppellantAmargundappa Arali Oil Miller, Gangavti
RespondentCommissioner of Income-tax in Mysore, Bangalore and ors.
Appellant AdvocateK. Jagannatha Shetty, Adv.
Respondent AdvocateG.R. Ehirajalu Naidu, Adv. and ;Advocate-General
Excerpt:
.....j] amendment of judgment/decree held, the application is filed as provided under the relevant provisions of the cpc if there is a mistake or wrongly typed or there is any mistake in writing or typing and an error arising out of the occurring from an accidental slip or omission is an error due to careless mistake or omission unintentionally made. but in the present case, detailed order has been passed by the trial court for rejecting the compromise petition as petitioner has failed to comply the orders of the court and the said suit has been dismissed in view of not adducing or leading any evidence. therefore, the court of the considered view that, in this type of litigation, there should be a finality in the matter, since the matter is pending adjudication from 1985 and petitioner..........to a sum of rs. 2,400/- . these penalties were imposed in the years 1952 and 1953.(3) the hyderabad income- tax act, under which the assessment of the petitioner's income was made, the penalties referred to above were imposed, was repealed by section 13 of the indian finance act, 1950, with effect from april 1,1950. but, as provided by section 13 (1) of the indian finance act, 1950 , the provisions of the hyderabad income- tax act continued to be in force for the purpose of the levy, assessment and collection of income-tax and super-tax in respect of the periods specified in that sub-section. during the pendency of the appeals before the income- tax appellate tribunal, the petitioner paid sum of rs. 2,819/- towards the tax payable by him for the year 1357 f. and a sum of rs......
Judgment:

Samantha Iyer, J.

(1) This application involves the interpretation of Section 13 of the Indian Finance Act, 1950. The question arises in this way.

(2) For the assessment years 1357 F. and 1358 F., the Petitioner who was the resident of the wrest while State of Hyderabad, was assessed to income-tax. The Income-tax Officer, Raichur who had the authority to make the assessment made the assessments on August 20 1951, determining the tax payable by the petitioner for the year 1357, F., to be Rs. 5,042/- and for the year 1358 F., Rs. 11,369/- . In the appeal preferred by the petitioner to the Income- tax Appellate Tribunal, the assessments made by the Income-tax Officer were modified. The tax payable , according to the order of the Tribunal, for the year 1358 F. It was Rs. 1,437/- and for the year 1358 F. it was Rs. 2,953/- . During the pendency of these appeals the petitioner having committed default in the payment of the tax determined by the Income-tax Officer, penalties were imposed on him by the Income-tax Officer, aggregating to a sum of Rs. 2,400/- . These penalties were imposed in the years 1952 and 1953.

(3) The Hyderabad Income- tax Act, under which the assessment of the petitioner's income was made, the penalties referred to above were imposed, was repealed by Section 13 of the Indian Finance Act, 1950, with effect from April 1,1950. But, as provided by Section 13 (1) of the Indian Finance Act, 1950 , the provisions of the Hyderabad Income- tax Act continued to be in force for the purpose of the levy, assessment and collection of income-tax and Super-tax in respect of the periods specified in that sub-section. During the pendency of the appeals before the Income- tax Appellate Tribunal, the petitioner paid sum of Rs. 2,819/- towards the tax payable by him for the year 1357 F. and a sum of Rs. 2,300/- towards the tax payable for the year 1358 F. It will, therefore, be seen that the tax paid by him for the year 1357 F. was Rs. 1,382/- in excess of what was found by the Appellate Tribunal s payable to by him. As a result of the final determination of the tax payable by the petitioner, in the appeal decided by the Income -tax Appellate Tribunal , the petitioner was entitled to a refund of the excess tax paid by him for the relevant assessment years.

(4) But, the fact that the petitioner was ultimately decided to be liable only to pay a smaller sum of money than that determined by the Income- tax Officer to be payable by him would have no materiality if it is held that the defaults committed by the petitioner in the payment of the Income-tax entailed the imposition of a penalty on him, on a proper construction of Section 13 (1) of the Indian Finance Act.

(5) The argument proffered by Mr. Jagannath Setty, appearing on behalf of the petitioners that collection of income-tax and super-tax the Hyderabad Income-tax Act continued to be in force and operative, its provisions in so far as they authorised the imposition of a penalty stood repealed with effect from April 1,1950 no longer making it possible for the Income-tax Officer, Raichur, to impose the impugned penalties on the petitioner.

(6) Section 13 (1) of the Indian Finance Act, reads :

Repeals and Savings :--

'13. (1) If immediately before the 1 statement day of April 1950 there is in force in any part B State other than Jammu and Kashmir or in Manipur, Tripura or Vindhya Pradesh or in the merged territory of Coach --Behar any law relating to income -tax or super-tax or tax on profits of business, that law shall cease to have effect except for the purposes of the levy, assessment and collection of income-tax and super-tax in respect of any period not included in the previous year for the purpose of assessment under the Indian Income-tax Act, 1922 (XI of 1982) for the year ending on the 31st day of March 1951, or for any subsequent year, or , as, the case may be , the levy, assessment and collection of the tax on profits of business for any chargeable accounting period ending on or before the 31 St. day of March 1949:

.. .. .. .. .. ....

(7) It is clear form the provisions of this sub-section that except for the purposes of the levy, assessment and collection of Income-tax and Super-tax, in respect of the period specified in sub-section (1), the provisions of the Hyderabad Income-tax Act ceased to have effect and stood repealed, with effect from April 1,1950. It is only if it can be said that the imposition of penalty is one which could be regarded as amounting to the levy assessment or collection of income-tax Act providing for the imposition of a penalty did not stand repealed, with effect from April 1, 1950, but continued to be in force and operative.

(8) It seems to us that the contention urged on behalf of the petitioners that the imposition of the penalties in this case on the petitioner cannot be regarded as assessments of income-tax or super-tax, within the meaning of those expressions occurring in Section 13(1) of the Finance Act must succeed. There is, in our opinion, a great distinction between a tax and a penalty. The provisions of the Hyderabad Income-tax Act are similar to those of the Indian Income-tax Act and it is clear that just as the scheme of the Indian Income-tax Act makes a distinction between a tax which may be demanded under the provisions of the Act, also makes a similar distinction.

Under the provisions of the Indian Income tax Act, interest by way of penalty may be imposed under Section 18-A, a penalty may be imposed under the provisions of Section 28 and a penalty may also be imposed under the provisions of S. 46 of the Act. The fact that Section 13 (1) of the Finance Act refers only to the levy, assessment and collection of Income-tax and super-tax and say s nothing about penalty, although the Income-tax Act itself makes a distinction between a tax and a penalty, is in our opinion, almost conclusive of the fact that Section 13 (1) of the Finance Act did not intend that the provisions of the Hyderabad Income-tax Act should continue to be operative or in force for the purpose of the imposition of a penalty under its provisions.

Whatever may be the view that may be taken about the permissibility or the imposition of penalties under Section 18-A and Section 28, on the basis of Section 44(3) of the Act, it is clear that no penalty which may be imposed under Section 46 of the Indian Income-tax Act can be regarded as income-tax or super-tax within the meaning of those expressions occurring in Section 13 (1) of the Finance Act. Section 18(1) of the Finance Act preserves the provisions of the Hyderabad Income-tax Act only for the purpose of the levy, assessment and collection of income-tax or super-tax, and if a penalty which may be imposed under the provisions of Section 58 of the Hyderabad Income-tax Act, under which the impugned penalties were imposed by the Income-tax Officer in this case, is not and cannot be regarded as income-tax or super-tax within the meaning of those expressions occurring in Section 18(1) of the Finance Act, it is clear that the provisions of Section 58 of the Hyderabad Income-tax Act were not preserved by the Section 18(1) of the Finance Act.

(9) This writ petition, therefore, succeeds. We squish the impugned orders made by the income-tax; Officer and the penalties imposed by him.

(10) In the circumstances, we make no order as to costs.

(11) Writ petition allowed.


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