Ramaprasada Rao, J.
1. In these writ petitions a common question arises. The petitioner is Sree Shanmughar Mills, Rajapalayam, represented by the official liquidator, Madras. For the years 1948-49 to 1953-54 the revenue did not accept the books of account of the company and had therefore to assess the company under the best judgment method. The assessments for the relevant years were completed in or about July, 1954. Contemporaneously with the said order, the company was subject to payment of penal interest under Section 18A(8) of the Indian Income-tax Act, 1922. As against the assessment orders, the petitioner-company, which was by then functioning, took up the matter in appeal before the appellate authority as well as the Tribunal. But it is seen from the records that during the course of such proceedings the company went into liquidation on April 30, 1959, on the final orders of this court in O.P. No. 297 of 1957. The official liquidator, thereafter, had to carry on the necessary administration connected with the winding-up of the company, one amongst which was to prosecute further the petitions or appeals by then filed by the company before the appellate or revisional authorities in the matter of assessments on the quondam company for tax. It is not in dispute that it was only on April 19, 1962, when the official liquidator came up to this court with a request for a reference on the alleged questions of law arising on the orders of the Income-tax Appellate Tribunal, which was ultimately refused by this court, that a quietus was given to the tax liability of the quondam company for the years in question. It can only then be fairly assumed that the total income of the company which was finally to be subject to levy in accordance with law was reckoned in a manner ordinarily known to the taxing statute.
2. As already stated, the Income-tax Officer, who completed the assessments for the respective years, levied penal interest under Section 18A(8), The official liquidator applied to the Inspecting Assistant Commissioner of Income-tax by a petition dated September 13, 1963, for waiver or remission of part of the penal interest as levied by the original assessing authority, but the Inspecting Assistant Commissioner, by his order, dated February 22, 1964, rejected the same on the ground that there had been an inordinate delay on the part of the assessee in making the claim for reduction of penal interest. The petitioner filed a petition under Section 33A(2) of the Indian Income-tax Act, 1922, equivalent to Section 264 of the Income-tax Act, 1961, read with Rule 48 of the Indian Income-tax Rules, 1922, to the Commissioner of Income-tax, Madras, seeking for interference with the order of the Inspecting Assistant Commissioner and sought for relief to which he was entitled in the matter of liability to pay penal interest. But the Commissioner of Income-tax, by his order dated October 31, 1966, rejected the revision petitions for all the assessment years as above on two grounds. The first one was that, as the assessment orders were the subject-matter of further processes by way of appeals before the appellate authorities and since the charging of interest under Section 18A(8) formed part of the assessment order itself, he was precluded from entertaining any revision of such orders, and, therefore, he was of the view that they were incompetent. The second ground on which the Commissioner rejected the revision petitions was that there was inordinate delay in the matter of their presentation and that, notwithstanding the fact that there was no time limit prescribed for the presentation or entertainment of such revision petitions, as there was considerable time Jag between the date when the assessments were finalised by the original authority and the date when the applications for revision under Section 18A(8) were filed, he was of the view that such inordinate delay could not be excused, as it would be unreasonable to do so. It is as against this order the present writ petitions have been filed. Incidentally, it may be mentioned here that the Commissioner on a similar approach made earlier to him rejected the same by passing a non-speaking order and it was only on a second approach that he made the challenged order.
3. The learned counsel for the petitioner contends that, as interest is a necessary concomitant to principal, and if the principal itself has not yet been ascertained finally, then the contention that the application should be made to the authorities without awaiting such finalisation of the income is not proper. His second contention is that there was not any unreasonable delay, in the peculiar circumstances of the case, and that the Commissioner of Income-tax failed to exercise his jurisdiction, though of a discretionary nature, by not dealing with the merits but dismissing the revision petitions as incompetent and delayed. On the other question that during the pendency of an appeal against the order of assessment, no application for revision of the assessment order made by the Income-tax Officer which relates to the payment of penal interest is maintainable, the learned counsel submits that such reasoning no longer survives in view of the pronouncements of this court.
4. I shall now take up the last contention. Though the Commissioner of Income-tax referred to the aspect that no revision would lie as against an order of the assessing authority charging penal interest under Section 18A(8) of the Act, yet he did not base his conclusion solely on this, as is seen from the later part of the order. In order to make this decision complete the learned counsel brought to my notice the decision of this court in South India Flour Mills Private Ltd. v. Central Board of Direct Taxes, : 70ITR863(Mad) which practically answers the objection raised by the Commissioner of Income-tax. In that case the court observed :
' Penal interest under Section 18A(6) of the Income-tax Act, 1922, is a penalty levied on account of underassessment of the estimated income for purposes of payment of advance-tax and an order levying penal interest under Section 18A(6) cannot be regarded as a part of the process of assessment of the total income of the assessee under Section 23,'
5. Closely following this principle is another statement which could be made depending upon the ratio of the case as above. The levy of penal interest under Section 18A(8) of the Indian Income-tax Act, 1922, particularly in a case where the assessment proceedings were based on the best judgment method, is naturally relatable to income estimated by the revenue for purposes of Section 18A in general, and cannot, therefore, be regarded as part of the process of assessment of the total income of the assessee under the other provisions of the Act. Until after the final income is assessed, by the aggrieved assessee resorting to all the available methods under the law, and until it can be satisfactorily stated that there has been exhaustion of such available remedies, it cannot be succinctly declared with any amount of certainty that such is the finally assessed total income of the assessee under the Income-tax Act. If, therefore, such total income is still to be ascertained by the aggrieved party availing himself of the statutory remedies, then from the mere fact that the assessing officer levied penal interest on the estimated income for purposes of the Act in general and for payment of advance tax in particular, it cannot be said that such reckoning of the penal interest is final for all purposes. Therefore, the opinion of the Commissioner of Income-tax that the revision petitions filed before him were incompetent, because the levy of penal interest under Section 18A(8) of the Act sprang from the assessment orders and there was no final assessment of total income cannot any longer survive arid be accepted.
6. The next contention is on the very scope of Section 18A(8) of the Indian Income-tax Act, 1922. Section 18A(8) enables the Income-tax Officer to add on to the tax determined on the basis of the regular assessment made by him interest as prescribed under the sub-section, provided that the Income-tax Officer finds that no payment of tax has been made in accordance with the other preceding sub-sections of Section 18A. In the instant case no such payment has been made. The Income-tax Officer Was, therefore, not in error in having levied what is loosely termed as penal interest. At one time it was not clear whether the fields of activity of Sub-section (8) of Section 18A and Sub-section (6) of the same section were similar. At any rate, the Bombay and Madras views prior to Chockalingam and Meyyappan v. Commissioner of Income-tax, : 48ITR34(SC) was different. In Lata Mangeshkar v. Union of India, : 36ITR527(Bom) a Division Bench of the Bombay High Court took the view that, where no payment of advance tax had been made by the assessee in accordance with Section 18A, the addition of interest in the regular assessment calculated in the manner laid down in Sub-section (6) was mandatory under Sub-section (8), that the Income-tax Officer had no discretion in the matter of reducing or waiving interest under Sub-section (8) and that the fifth proviso to Sub-section (6), which invested the Income-tax Officer with such discretion, was not applicable to cases falling under Sub- section (8). In that case also they considered Rule 48 of the Income-tax Rules which conditioned the exercise of such a discretion of the Income-tax Officer to reduce or waive interest, but they were of the view that such reduction or waiver could be exercised by the Income-tax Officer only in cases falling under Sub-section (6) which dealt with cases of normal assessments and not in cases falling under Sub-section (8). This was also the view of this court. In Panchavarnathammal v. Commissioner of Income-tax : 86ITR527(Mad) . See Appendix infra. again a Division Bench of this court categorically stated that Sub-sections (6) and (8) of Section 18A did not operate in the same field, but covered two different classes of assessees, those who had paid some advance tax and those who had not paid any advance tax, and that the. fifth proviso to Sub-section (6) operated to govern only cases falling within the ambit of that Sub-section. It was further held that Rule 48 was not general in its application and that it had been framed only to give effect to the fifth proviso to Sub-section (6) and could not be made applicable to cases coming within the purview of Sub-section (8) of Section 18A.
7. The decision of the Bombay High Court referred to above was given on November 7, 1958, and that of this court on 20th August, 1962. The learned counsel for the revenue referred me to a circular issued by the Central Board of Revenue dated November 6, 1956, which runs as follows:
'Circular No. 44(DL-42) D of 1956 dated 6-11-1956 of the C.B.R.
Interest chargeable under Section 18A(8).
Attention is invited to the Board's letter No. 29(233)-I.T./54 dated the 20th May, 1954, in which it was stated that the power to reduce or waive interest could be exercised only in cases covered by Section 18A(6) and not under Section 18A(8). The matter has been reconsidered and it has been decided that the power might be exercised in cases covered by Section 18 A(8) also, subject to the conditions prescribed in Rule 48 and the further instructions given in Circular No. 19(XL-29) D of 1954.
2. These instructions would apply only to assessments completed after the issue of this Circular. Cases already decided should not be reopened.
3. The concluding paragraph of Circular No. 19 (XL-29) D of 1954 is hereby cancelled.'
8. According to the learned counsel, though the Bombay and Madras High Courts expressed a different view, the revenue, as a matter of policy, was inclined to be more liberal in view of the circular issued, but on record it does not appear to be so. The circular was not brought to the notice of either the Bombay High Court or this court, when they decided the above two cases. The result was that even the revenue, in spite of the circular, was of the view that Rule 48 was applicable only to cases where part of the advance tax had been paid or to cases of assessment followed up by such payment and not to cases where the assessment proceedings were completed and no advance tax has been paid. The controversy, however, has been set at rest by the Supreme Court in Chockalingam and Meyyappan v. Commissioner of Income-tax, : 48ITR34(SC) . In very strong words, the Supreme Court observed:
'Sub-section (6) of Section 18A, without reserve, is expressly made applicable mutatis mutandis to Sub-section (8). There is nothing to show that in applying Sub-section (6) any of its provisos is to be left out. Subsection (8), no doubt, uses the word 'shall', but in the context of Sub-section (6) and the fifth proviso the word can only be read as mandatory, if relief under the proviso is not given. The circumstances which entitle the Income-tax Officer to give relief in cases arising under Sub-section (6) may also be circumstances justifying relief in cases arising under Sub-section (8). All the sub-rules of Rule 48 apply equally to cases of part-payment and to cases of no payment of advance tax.'
9. I have referred to this decision only to show that the intendment of both Sub-sections (6) and (8) of Section 18A is to give relief by way of remission either in whole or in part to an assessee, who complains that the levy of interest under either of the above provisions was not justified or reasonable. If, therefore, an assessee can approach the revenue for relief in the matter of reduction or total waiver of the levy of penalty by the original authority and as confirmed by the appellate authority or further Tribunals, even after the assessment had reached a final stage, the question is whether such an approach has been made by the petitioner within a reasonable time or whether there has been an inordinate delay in the matter of such approach.
10. Rightly it can be presumed that, as the law was unsettled till October 12, 1962, as regards the right of persons similarly situated as the writ-petitioner, namely, whether they could successfully approach the authorities for relief under Rule 48 read with Sub-section (8) of Section 18A of the Act, one cannot expect a statutory officer like the official liquidator to boldly approach such authorities in the teeth of the then declared law. As already observed by me, the final income could be said to have been reckoned for all purposes only on April 19, 1962, when the application for reference made by the writ-petitioner was dismissed by a tax Bench of this court. No doubt, some time before the said date, the Tribunal finalised the assessment proceedings and normally the final income could easily be ascertained from such an ultimate decision of the Tribunal. But in a case where the aggrieved assessee takes up the matter further under the provisions of the enactment and seeks for a reference on questions of law said to arise from the decision of the Tribunal, it cannot be said that such proceedings undertaken by the assessee are mere empty formalities and that such a situation cannot be availed of by him for the purpose of pleading in an ancillary proceeding, though at a later stage, that such application for reference was made by him bona fide and that he was prosecuting the assessment process further so as to obtain relief in a manner known to law, If, therefore, April 19, 1962, is to be taken as the date when the assessee could be said to have had reasonable notice of the finality of the assessment proceedings, then the question is whether he deliberately delayed the presentation of the petitions for waiver of the penal interest thereafter.
11. I have already referred to the fact that between April 19, 1962, and October 12, 1962, the law was not clear as to whether such an application under Rule 48 could be made in a situation where the assessment proceedings were completed and whether Sub-section (8) of Section 18A was a bar. According to the decision of this court in Panchavarnathammal v. Commissioner of Income-tax, : 86ITR527(Mad) . See Appendix infra. the writ-petitioner could not have filed such a revision petition ; he could do so only after October 12, 1962. Therefore, we have to see whether between October 12, 1962, and September 13, 1963, there was such an inordinate delay on the part of the petitioner which would disentitle him to the relief of waiver or remission of interest on the advance tax payable by the company in liquidation.
12. I do not think that the period as above is such an unreasonable lapse of time which ought to Compel a quasi-judicial Tribunal to find as a matter of course that it is an unreasonable delay.
13. The Commissioner of Income-tax in the instant case thought that the delay which he had to consider for the purpose of condonation, notwithstanding the fact that there was no time limit prescribed for the purpose, was the period between 1953 and 1963. That is not so. As a matter of fact, the period which ought to be considered in the real sense, to determine whether there was any such unreasonable delay on the part of the aggrieved assessee, is the period between October 12, 1962 and September 13, 1963. The official liquidator's memorandum of grounds of revision made it clear that, as he was an officer of the Government of India, he had to follow certain conventions and that before he could take legal action he had to fortify himself with legal opinion, besides making consultations with the committee of inspection, which was by then functioning, on the subject of the liquidation of the erstwhile mills. He had also to obtain the orders of court to make the necessary petitions for relief. These are all factors which ought to be taken into consideration. Obviously the first respondent considered that there was a delay of ten years. That is not so, and, therefore, there is an error apparent. I am of the view that the delay, if any that has happened, is only a few months, and this is not quite abnormal in matters which ought to be undertaken by a public officer like the official liquidator. In this view of the matter, I am. of the opinion that there has not been any unreasonable delay in the matter of presentation of the application under Sub-section (8) of Section 18A read with Sub-section (6) already referred to. Therefore, the rule nisi in each of these writ petitions is made absolute and the writ petitions are allowed. But there will be no order as to costs.
14. The Commissioner of Income-tax shall take up the revision petitions dated September 13, 1963, filed by the petitioner and dispose of the same in accordance with law and bearing in mind the observations contained in this judgment.