RAJAGOPALA AYYANGAR, J. - The question is whether the Income-tax authorities had jurisdiction to levy a penalty for non-payment of advance tax. The petitioner was an assessee already, he having been assessed to tax in 1952-53 and the Income-tax Officer issued a notice under section 18A(1) requiring the assessee to pay advance tax on the basis of the completed assessment. In issuing the notice however he made a mistake in fixing the dates on which the instalments of the tax were payable and instead of specifying the 15th September, 1954, 15th December, 1954, and 15th March, 1955, as the due dates mentioned the corresponding dates of the succeeding year. The assessee did not make any payment on the 15th September, 1954, and for this default in payment, the Income-tax Officer imposed a penalty of Rs. 1,000 on the assessee. It is the correctness of this imposition of penalty that is challenged here. I am saying this because the other penalty of Rs. 3,000 imposed for non-payment of the December instalment has been set aside by the Commissioner of Income-tax.
In my judgment the petition has to be allowed. No penalty can be imposed for non-payment of tax, unless the tax is in arrears and there is default and this can occur only when the date fixed for its payment is allowed to pass without payment. If as is common ground the assessee was directed to pay only on 15th September, 1955, he cannot be held to have been in default for non-payment of the sum on 15th September, 1954. It might be that this was due to a mistake of the Income-tax Officer - but if the assessee acts as he is directed, he cannot be held to blame for not acting as he was intended to act.
The petition is allowed and the rule made absolute.