V. Bhargava, J.
1. By this petition under Article 226 of the Constitution, the petitioner seeks the issue of a writ of certiorari to quash a notice of demand dated 25-3-1958, which included the demand for a sum of Rs. 7265-11-0 levied upon the petitioner by way of interest under Section 18A(6) of the Income-tax Act. This demand is challenged on two grounds: The first ground urged by learned counsel for the petitioner was that initially the notice of demand for payment of advance income-tax under Section 18A(1) of the Act was void in law because the demand in that notice was based on the last completed assessment of the assessee but in that demand his income from two firms of which he was a partner was taken to be the same as had been included in his last completed assessment and there was no substitution for that amount of the share of his income as calculated on the basis of subsequent completed assessments of those firms.
This ground clearly fails for three reasons. The first reason is that the ground is based on non-compliance by the Income-tax Officer with the provisions of the second proviso to Section 18A(1)(a) of the Income-tax Act and that proviso applies only to registered firms. There is no assertion by the petitioner in any affidavit that the two firms in question were registered firms. The second reason why this ground cannot succeed is that there is nothing to show that the procedure adopted by the Income-tax Officer, in any way, acted to the prejudice of the petitioner. The last completed assessment of the petitioner was for the assessment year 1943-44 and in that assessment a sum of Rs. 7,834/- had been included as his share of income from the firm Goverdhandas Radhey Lal, According to the petitioner, the latest assessment of the income of this firm had been completed in respect of the assessment year 1946-47,
The petitioner also stated that he was a partner in another firm Babu Ram Goverdhandas and the assessment for that firm in the year 1947-48 had also been completed before the issue of the notice under Section 18A(1) of the Income-tax Act. The counter-affidavit shows that these two firms came into existence by bifurcation of the original firm Goverdhandas Radhey La] during the assessment year 1943-44. Consequently, if there was any substitution, according to the proviso, the substitution could only be made by putting for the figure Rs. 7,834/- shown as petitioner's income from the firm Goverdhandas Radhey Lal for the year 1943-44, a sum which would have been the total of his share in the income as assessed of both the firms Goverdhandas Radhey Lal and Babu Ram Goverdhandas for the years for which the income of these firms had been subsequently assessed.
The counter-affidavit indicates that according to the assessment of the firm Goverdhandas Radhey Lal for the year 1946-47, the share of the petitioner in its income was Rs. 3,198/- but it is not at all known what would have been the share of the petitioner in the income of the firm Babu Ram Goverdhandas which was assessed for the year 1947-48. It thus appears that the petitioner has not given sufficient information to show as to what should have been the correct figure to be substituted in place of Rs. 7,834/-.
The effect of the bifurcation of the original firm Goverdhandas Radhey Lal could be taken into account in two possible ways: one was that, the firm having been bifurcated subsequent to the year 1943-44 having been reconstituted into two firms, the second proviso to Section 18A(1)(a) of the Income-tax Act might not have been applicable at all as it might have been possible to hold that there could be no substitution under that proviso when the firm itself had ceased to exist and the assessment was subsequently made not of that original firm but of a different firm.
In the alternative, it might have been held that these two subsequent firms Gobardhandas Radhey Lal and Babu Ram Goverdhandas, as reconstituted, represented the original firm Goverdhandas. Hadhey Lal, in which case the share of the assessee in the assessed income of both the firms could have been, substituted for the income of the original firm Goverdhandas Radhey Lal as shown in the assessment for the year 1943-44. In the former case, the proviso would not have been applicable at all. In the latter case, as we have indicated above, it is not possible to find out what amount should have been substituted and whether the amount to be substituted would or would not have exceeded the amount of Rs. 7834/-.
In these circumstances, it is not necessary for us to express any opinion whether, after the bifurcation of the firm, the proviso could or could not apply. In any case, it cannot be held that, in the notice of demand under Section 18A(1), the figure was shown at an excessive amount and had not been reduced. Consequently, it cannot be held that that notice of demand was incorrect. The third reason is that even if it be held that there was an inaccuracy in the notice of demand, it will not invalidate that notice and make it altogether void. If, according to the assessee, the demand was excessive, he could have certainly moved the officer issuing the notice of demand to correct the demand but the mere inaccuracy in the demand would not make the notice of demand entirely void and ineffective, In pursuance of that demand, the petitioner submitted his own estimate under Section 18A(2) of the Income-tax Act and deposited the tax on the basis of his estimate.
Once that estimate had been submitted and the tax deposited on its basis, the original figure of the demand in the notice under Section 18A(1) of the Act became immaterial. For the same proceedings, the relevant figure then was the figure of estimate made by the petitioner himself. The interest under Section 18A(6) of the Income-tax Act had to be calculated on the difference between the income actually assessed and the income on which the advance tax-had been deposited by the petitioner. At the stage of calculating the interest, the figure in the notice under Section 18A(1) did not come up for consideration at all. Consequently, the order imposing the interest is not at all affected by any inaccuracy in that notice of demand.
It might have been necessary to consider this aspect in greater detail had it been asserted on behalf of the petitioner that, in case the correct figure has been mentioned in the notice of demand under Section 18A(1) of the Act, the demand would have been equal to the amount actually deposited by him on his own estimate. No such assertion has been made. In fact, on the face of it, the demand could not have been cut down to a figure equal to or less than the amount of the tax actually deposited by the petitioner on his own estimate, so that the deposit by the petitioner could not have saved him from the liability to interest under Section 18A(6) of the Act. That liability was, therefore, correctly imposed.
2. The second ground, on which this petition was pressed on behalf of the petitioner, was that the Income-tax Officer could have given to the petitioner the benefit of the fifth proviso to Section 18A(6) of the Income-tax Act read with Rule 48 of the rules framed under that Act. In that proviso, it is laid down 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.'
Under Rule 48(1), the Income-tax Officer may reduce or waive the interest payable under Section 18A when the relevant assessment is completed more than one year after the submission of the return, the delay in assessment not being attributable to the assessee. In the affidavit filed on behalf of the petitioner, it is not claimed that, at any stage, the Income-tax Officer was requested on his behalf to exercise his powers under that proviso in favour of the petitioner.
Learned counsel urged that the petitioner was unable to do so as he got no opportunity at all to contest the imposition of this interest. No facts are given in the affidavit to show that the petitioner had no opportunity. On the other hand, the counter-affidavit gives an indication that the interest under Section 18A(6) was imposed during the assessment proceedings and no grievance is made that, during the assessment proceedings, the petitioner had not been given a full hearing as required by the law. There is then the presumption in favour of the regularity of the proceedings taken by the Income-tax Officer. No doubt, one fact, viz., that the assessment was not completed within one year after the submission of the return is admitted but the other essential fact that the delay in assessment was not attributable to the assessee, as asserted by the petitioner, was denied in the counter-affidavit on behalf of the Department
That was a question which could only be decided by the appropriate income-tax authority. It was a matter of discretion with the Income-tax Officer as the proviso only contains an enabling provision giving powers to the Income-tax Officer to reduce or waive the interest payable by the as-sessce. There is no mandatory direction that he must always do so. In this particular case, no question can arise for interference by this Court in respect of the exercise of the discretion by the Income-tax Officer when it is not even asserted that the Income-tax Officer paid no heed to this provision of law and that he ignored it when he passed the order. In all these circumstances, this ground also has no force.
3. The petition fails and is dismissed with costs,
4. This order will also govern the Civil Miscellaneous Writ No. 748 of 1956 in which also the same principles of law arc involved and the facts are similar though the figures or relevant years may be slightly different. That petition is also dismissed with costs.