The Income-Tax Officer Circle Ii Madura, And Another v. M. R. Vidyasagar

2 S.C.R. SUPREME COURT REFORTS THE INCOME-TAX OFFICER CIRCLE II MADU!{A, AND ANOTHER M. R. VIDYASAGAR (B. P. SINHA, c. J., J.L. KAPUR. M. H!DAYATULLAJI, J.C. ~HAH and J. H.. MunHOLKAR, JJ. ) Income Tax-Payment of advance tax-Assessed income exceeded the estimate-Levy of interest-Power to reduce or waive- -When cc,uld be exercised-- Indian Income-tax Act, 1922 (11 of 1922), s. 18A (6) fifth proviso-Indian Income•tax (Amendment) Act, 1953 (22j of 1953), s. 13-Income-tax Ruks r.48. The Income-tax Officer, Madura, issue 1 notice under s. 18A (I) of the Indian Income-Tax Act, 1922, for payment of advance tax. R, the then manager of the Hindu Undivided family availed of the option to submit a l'evised estimate for the years 1946-47 and 1948-49. The assessment ofthese two years were completed respectively in November, 19)0 and February, 1951, as the total incom~ a:;je;sed far exceeded the estimate submitted by R, th: Ino Hll!·ti< Officer ordered the respondent, the legal representative of R, ti;l P"Y the interest under s. IBA (6) of the •Act. On appeal, the Income-tax Appellate Tribunal reduced the income and. the Income-tax Officer in giving effect to the said order reduced the interest and c.<llect upon the respondent to make payment. The respondent asked the Income-tax Officer not to levy inter· e,t under s. ISA 16), submitting that the levy was illegal and unju'1ified, alternatively he requested that the interest be waived by virtue of the powers vested on the Income-tax Officer under proviso 5 to•· 18'\ (6) which was added by s. 13 of Act 25 of l9j3, with retrospective effect from April 1952. The Income-taJ< Officer and the Inspection Assistant Commi,,ioner declined t~ accede to the request. The res-pondent then moved the High Court at Madras for a writ under Art. 226 cancelling the levy of interest on the ground among ochers that refusal by the Revenue authorities to cancel the levy was arbitrary and not based on any judicial exercise of the discretion vested by the Act. The High Court up-held the plea, ordered the Income tax Officer to decide whe-ther the respondent had made out a case for the exercise of the discretion. The only question in the appeal before the Supreme Court was whether benefit of the said 5th proviso to s. I SA (6) may be granted in respect of asse•smcnts of in-come which were . completed by the Income-tax Officer be-fore Ap.ril 1952. lS62 n.n.-"""' 0 .Jur Cfrtj< II Madut~ v. JI. B. V~,aMl.far SWJ. 614 SUPREME OOURT REPORTS [1962] SUPP. Htld, that the jurisdiction under 5th proviso of s. IBA (6) of the Income-tax Act may be exercised by the income-tax Officer in all cases which wrre pending on April I, 1952 before him or any superior authority having under the Act power to modify the assessment of income. C!v:IL APPELLATE JURISDICTION : Civil Appeal Nos. 545 and 546 of 1900. Appeals from the judgment and order dated Augmt 13, 1954, of the Madras High Court in Writ Petitions Noe. 743 and 7-!S of J 95!. K. N. Rajagopal Sastri and P. D. Menon, for the appellants. The respondent did not appear. 19.62. January 17.-The Judgment of the coun was delivered by SHAH, J.-'Ihcse are two appeals with certi- ficates of fitness granted by the High Court of Judicature at Ma.drae against certain orders passed in Writ Petitions uu<ler Art. 226 of the Colllltitution. One Ram1111wami Iyer-father of the respon- (