1. This appeal is by unsuccessful writ applicants who filed a petition before this Court to set aside an order Ext. P-3 imposing penalty for non-payment of certain amounts covered by two earlier orders Exts. P-1 and P-2.
2. Exts. P-l and P-2 were passed against the appellants for alleged concealment of income and for non-payment of advanced tax under Section 18A of the Indian Income Tax Act, 1922. The question is whether a penalty can be imposed for non-payment of penalty. The submission on behalf of the appellants is that the provisions in the Indian Income-tax Act, 1922, which admittedly is the relevant statute, do not warrant such procedure. In this submission the appellants are supported by a decision of this court in M. W. Mathew v. Second Additional Income-tax Officer, Kottayam, . There is yet another decision of this Court in Padmanabha Menon Krishna Menon v. Commissioner of Income-tax. Southern Division, Bangalore, : 32ITR651(Ker) where the same view has been taken.
3. Notwithstanding the above decisions of this Court, counsel on behalf of the revenue has contended that the view taken in those decisions should be reconsidered because a different view has been expressed by the Allahabad High Court in the decision in Shri Chhotey Lal, Kanpur v. Income-lax Officer, C-Ward. Allahabad, : 46ITR762(All) . The basis of the decision of the Allahabad High Court, as we read the judgment in that case, is the interpretation placed by that court on the decisions of the Supreme Court in C. A. Abraham v. Income-tax Officer, Koltayam, : 41ITR425(SC) and in Commissioner of Income-tax, Andhra Pradesh v. Bhikaji Dadabhai and Co., : 42ITR123(SC) . With great respect we do not think that the interpretation placed by the Allahabad High Court on the decisions of the Supreme Court is correct. The Income-tax Act makes a distinction between a tax and a penalty. The word 'assessment' used in the statute may however cover penalty proceedings as it does some-times denote the whole procedure for imposing a liability of tax payable and that we think is all that has been decided by the Supreme Court in the decision referred to.
4. We adhere to the view taken in (1956) 29 ITR 456: AIR 1956 Trav 84 and in : 32ITR651(Ker) and in that view, theorder Ext. P-8 cannot stand. We therefore allow this appeal and set aside the order Ext.P-8. There will be no order as to costs.