Jagdish Sahai, J.
1. This special appeal is directed against the judgment of Brij LalGupta, J. dated 6-9-1961, dismissing writ petition No. 483 of 1957 filed by the appellant-petitioner, M/s. P. C. Dwadesh Shreni and Co. Ltd., Aligarh (hereinafter referred to as the Company).
2. The Income-tax Officer demanded a certain amount of money as advance payment of income-tax under Section 18-A of the Income-tax Act, 1922 (hereinafter referred to as the Act) from the company. Admittedly the Company did not pay any part of the demand. The stand taken by it was that being entitled to a certain refund and the amount of refund being in excess of the demand, no payment was required to be made. In the writ petition and the affidavit filed in support of it an averment was made that the sum of Rs. 7415/5/- out of the amount which the Company was entitled to receive as refund was adjusted by the Income-tax Officer towards the payment of advance income-tax demanded from the Company. This position is admitted on behalf of the Income-tax Department in the counter-affidavit.
3. On the ground of default in payment of advance income-tax, the Income-tax Department determined the sum of Rs. 4,805 as payable by the Company to the department as interest under Section 18-A (8) of the Act. The Company filed an appeal which was dismissed by the Appellate Assistant Commissioner on the finding that it was not competent. The Tribunal on an appeal by the Company affirmed the order of the Appellate Assistant Commissioner by dismissing the appeal. Thereafter the Company moved writ petition No. 483 of 1957 in this Court, which, as already stated earlier, has given rise to this special appeal.
4. The following two submissions have been made before us by Mr. Pachauri, who has appeared for the Company:
1. That on a correct interpretation of the provisions of Section 18-A(8) of the Act no interest was liable to be paid by the Company.
2. That in any case in the absence of an order determining the aforesaid amount of Rs. 4,805 the amount of Rs. 4,805 as interest is not chargeable. No other submission has been made before us.
5. Section 18-A, which falls under Chapter IV and is headed as 'Advance payment of tax' so far as relevant for our purposes, reads:
'18A(1)(a). In the case of income other than income chargeable under the head 'salaries' the Income-tax Officer may, on or after the 1st day of April in any financial year, by order in writing, require an assessee to pay quarterly to the credit of the Central Government on the 15th day of June, 15th day of September, 15th day of December, and 15th day of March in that year, respectively, an amount equal to one quarter of the income-tax and super-tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed,. .......'
(6) Where in any year an assessee has paid tax under Sub-section (2) or Sub-section (3) onthe basis of his own estimate, and the tax so paid is less than eighty per cent of the tax determined on the basis of the (regular assessment (reduced by the amount of tax deductible in accordance with the provisions of Section 18 on any income, other than income chargeable under the head 'Salaries', included in such assessment), so far as such tax relates to income other than income chargeable under the head 'salaries') and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made, simple interest at the rate of six per cent per annum from the 1st day of January in the financial year in which the tax was paid up to the date of the said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said eighty per cent..... . . ..........
8. Where, on making the regular assessment, the Income-tax Officer finds (that no payment of tax has been made) in accordance with the foregoing provisions of this section, interest calculated in the manner laid down in Sub-section (6) shall be added to the tax as determined on the basis of the regular assessment.
(Underlined by us). (Words underlined in the judgment are put into brackets here--Ed.) Admittedly even after the adjustment of the sum of Rs. 7,415/5/- some amount of the demand of the advance income-tax remained due from the Company. Mr. Pachauri contends that the words underlined by us falling in Section 18-A(8) of the Act show that the provisions of that section would apply only when the entire demand of advance income-tax has not been paid and not to a case where a part of the amount has been paid either in cash or by adjustment and only the balance remained to be paid. Mr. Pachauri lays stress upon the words 'no payment of tax has been made'. In our judgment the submission is not well founded. The expression 'no payment of tax has been made' is comprehensive enough to include a case of partial non-payment. That expression, in our judgment, means when the amount due has not been paid, whatever be the amount, whole or part.
5A. Mr. Pachauri has placed reliance upon the provisions of Sub-section (6) of Section 18-A of the Act. His contention is that the use of the words 'interest calculated in the manner laid down in Sub-section (6)' occurring in Sub-section (8) suggests that the provisions of Subsection (6) have been made applicable to proceedings under Sub-section (8) and that inasmuch, as Sub-section (8) in its operation is confined to a case where a payment made under Sub-section (2) or (3) of Section 18-A is ultimately at the time of final assessment, found to be short, no interest can be charged in the present case, not being a case of payment made under Sub-section (2) or (3) of Section 18-A of the Act.
6. In our judgment the submission is not supported by the language of the statute. All that Sub-section (8) provides for is that the in-terest shall be calculated in the manner laid down in Sub-section (6). It does not make the provisions of Sub-section (6) govern the proceedings under Sub-section (8) of Section 18-A of the Act nor does it make the proceedings under Sub-section (8) subject to the provisions of Subsection (6). Instead of giving in Sub-section (8) itself the manner in which the interest would be calculated, for convenient drafting the legislature referred to Sub-section (6) only for the limited purpose of providing the manner in which the interest would be calculated. The words used are 'interest calculated in the manner laid down in Sub-section (6) shall be added to the tax as determined on the basis of the regular assessment,' and not that the provisions of Sub-section (6) of Section 18-A would apply, or would control the proceedings under Sub-section (8). In our judgment, therefore, what was intended by Sub-section (8) was that on the amount of advance income-tax remaining unpaid simple interest shall be charged at the rate of six per cent per annum from the 1st of January in the financial year in which the tax was liable to be paid upto the date of regular assessment.
As said earlier, the legislature on the ground of convenience only, did not insert, in Sub-section (8) the words
'simple interest at the rate of six per cent per annum from the first day of January in the financial year in which the tax was liable to be paid upto the date of regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short' and just used the words
'interest calculated in the manner laid down in Sub-section (6) shall be added to the tax as determined on the basis of the regular assessment.'
We are, therefore, satisfied that the first submission of Mr. Pachauri is without any merits and for that reason we overrule it.
7. It is true that Brij Lal Gupta, J. disposed of a similar submission made before him on the ground that the adjustment would not amount to payment. The learned single Judge has in this connection observed as follows:
'Admittedly, in this particular case, payment was not made of specified sums of money, which were payable under the notice of demand under Section 18-A on certain specified dates. It is a different matter that certain money may have been refundable to the petitioner. It may be that these monies may have been adjusted against the demand for advance payment of income-tax, but that would not make the sum refundable and/or adjusted a payment in accordance with the foregoing provisions of this section. The sums might be refundable as learned counsel himself says under Section 49E of the Income-tax Act, but a refund under Section 49-E or its adjustment towards his liability for payment of advance income-tax would not be a payment as contemplated in Sub-section (8) and in any case an application for that purpose will have to be made. For all these reasons I am of the view that the contention of learned counsel is not correct that the petitioner was not liable for payment of interest under Sub-section (8) of Section 18-A.'
8. As is apparent from this judgment we are not founding ours on the grounds on which Brij Lal Gupta J. rejected the submission of the Company. We are of the opinion that the amount adjusted must be treated as a payment made and to that extent with great respect to Brij Lal Gupta J. we disagree with him. But that does not improve the position of the Company and for the reasons, which we have already given in our judgment, we have come to the conclusion that in the circumstances of the case interest was payable by the Company on the balance of the amount due from it as advance income-tax. We find some support from Gursahai Saigal v. Commissioner of Income Tax, Punjab : 1ITR48(SC) . Their Lordships have observed as follows:
'That Sub-section (8) intended to and did in the clearest terms impose a charge for interest seems to us to be beyond dispute. It says that interest calculated in a certain manner 'shall be added to the tax'. We did not here have to resort to any equitable rule of construction or to alter the meaning of the language used or to add to or vary it in order to arrive at the conclusion that the provision intended to impose a liability to pay interest. That is the plain effect of the language used. But the sub-section also provides that the interest for which liability was created has to be calculated in a certain manner. It is this provision which has given rise to the difficulty. But obviously this provision only lays down the machinery for assessing the amount of interest for which liability was clearly created; it in substance says that in calculating the amount of interest the machinery of calculation laid down in Sub-section (6) shall be applied. The proper way to deal with such a provision is to give it an interpretation which, to use the words of the Privy Council in Mahaliram Ramjidas's case 'makes the machinery workable, ut res valeat potius quam per-eat'. We, therefore, think that we should read Sub-section (6), according to the provisions of which interest has to be calculated as provided in Sub-section (8), in a manner which makes it workable and thereby prevent the clear intention of Sub-section (8) being defeated.'
9. Admittedly there is no order passed by the Income-tax Officer awarding interest. It is clear from the language of Sub-section (8) read with Sub-section (6) of Section 18-A that in case of default of payment, interest shall be calculated in the manner provided in Sub-section (6) and the amount arrived at shall be added to the tax determined on the basis of the regular assessment. In the present case what has been done is that in the assessment form appended to the notice of demand issued under Section 29 of the Act the sum of Rs. 4805 has been added to the amount of tax on the basis of the regular assessment. Section 18-A (8) or any other provision in the Act does not require a separate order awarding interest. Sub-section (8) only provides that the amount calculated shall be added to the tax as determined on the basis of the regular assessment. Consequently in our judgment the law does not require the passing of aseparate order awarding interest. The only order in such a case that is required to be made is the order of assessment and the law stands fully complied with when in the assessment form not only the amount determined in the regular assessment, but also the amount calculated under Subsection (8) read with Sub-section (6) of Section 18-A of the Act has been shown. It is not in dispute in the present ease that both these amounts have been shown in the total column. We, are, therefore, satisfied that there is no substance in the second submission of the learned counsel also.
10. As already stated earlier these are the only two points that have been argued before us.
11. Having given the matter our anxious consideration we are satisfied that this special appeal is without any force. It is accordingly dismissed with costs.