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Commissioner of Income-tax Vs. Roop NaraIn Ram Chandra (P.) Ltd. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 420 of 1968
Judge
Reported in[1973]87ITR13(All)
ActsIncome Tax Act, 1922 - Sections 18A(3) and 23B
AppellantCommissioner of Income-tax
RespondentRoop NaraIn Ram Chandra (P.) Ltd.
Appellant AdvocateB.L. Gupta and ;R.R. Misra, Advs.
Respondent AdvocateS.D. Dubey, Adv.
Excerpt:
- .....of 1922 '2. the assessee is a private limited company. during the financial year relevant for the assessment year 1959-60 the assessee did not file an estimate of its income under section 18a(3) of the indian income-tax act, 1922. on assessment proceedings being taken, it was found that the assessee had considerable income. the income-tax officer, in the view that the omission of the assessee to file an estimate of its income under section 18a(3) called for penalty proceedings under section 274 read with section 273 of the income-tax act, 1961, issued a notice to the assessee to show cause against the levy of a penalty. the assessee contended that the provisions of the act of 1961 were not attracted, as no default under section 212(3) was contemplated in section 273. the income-tax.....
Judgment:

Pathak, J.

1. The Income-tax Appellate Tribunal has referred the following question for the opinion of this court:

'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee had no obligation to file an estimate of its income under Section 18A(3) of the Act of 1922 '

2. The assessee is a private limited company. During the financial year relevant for the assessment year 1959-60 the assessee did not file an estimate of its income under Section 18A(3) of the Indian Income-tax Act, 1922. On assessment proceedings being taken, it was found that the assessee had considerable income. The Income-tax Officer, in the view that the omission of the assessee to file an estimate of its income under Section 18A(3) called for penalty proceedings under Section 274 read with Section 273 of the Income-tax Act, 1961, issued a notice to the assessee to show cause against the levy of a penalty. The assessee contended that the provisions of the Act of 1961 were not attracted, as no default under Section 212(3) was contemplated in Section 273. The Income-tax Officer, rejecting the plea of the assessee, imposed a penalty of Rs. 20,000. On appeal by the assessee, the Appellate Assistant Commissioner found that the assessee had been provisionally assessed to tax for the assessment year 1957-58 under Section 23B of the Act of 1922, on February 13, 1968. Following the decision of this court in Income-tax Officer v. Mani Ram, Special Appeals Nos. 662 663, 664, 665, 666, 667 & 671 of 1962, decided on 25-4-1963.the Appellate Assistant Commissioner held that the assessee was not obliged to file an estimate of its income under Section 18A(3) in the absence of a notice from the Income-tax Officer under Section 18A(1). As no such notice had been issued by the Income-tax Officer, he set aside the penalty order as not maintainable. The Income-tax Officer appealed to the Income-tax Appellate Tribunal, and the Tribunal affirmed the order of the Appellate Assistant Commissioner and dismissed the appeal. At the instance of the Commissioner of Income-tax, the Tribunal has now made this reference.

3. Section 18A(3) of the Income-tax Act, 1922, provides that a person who has not hitherto been assessed, if his total income of the period which would be the previous year for an assessment for the financial year next following is likely to exceed the maximum amount not chargeable to tax in his case by two thousand five hundred rupees, must, before March 15, in each financial year, send to the Income-tax Officer an estimate of the tax payable by him on that part of his income to which Section 18 does not apply and must pay the amount in accordance with Section 18A(1). It has now been held by the Supreme Court in Income-tax Officer v. Mani Ram, [1979] 72 I.T.R. 203 (S.C.).affirming the decision of this court, that the word 'assessed' in Section 18A(3) should be read in its ordinary sense as comprising every kind of assessment including a provisional assessment under Section 23B of the Act. Since on the facts before us a provisional assessment under Section 23B had already been made on February 13, 1958, Section 18A(3) could not come into play in relation to the financial year relevant for the assessment year 1959-60. The assessee was not a person who had not hitherto been assessed. He hadbeen assessed already on February 13, 1959, under section 23B. The Tribunal is right in the view taken by it that ahe assessee had no obligation to file an estimate of its income under Section 18A(3).

4. The question referred is answered in the affirmative.

5. The Assessee is entitled to its costs, which we assess at Rs. 200. Counsel's fee is assessed at athe same figure.


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