INCOME TAX OFFICER BOMBAY Vs. SIMPLEX MILLS LTD

JUDGEMENT

(1.) This appeal is entirely without substance. It arises out of an application under Art. 226 of the Constitution made by the respondent assessee for a writ quashing an order of assessment made under s. 34 of the Income-tax Act, 1922.

(2.) The respondent made" advance payment of tax under s. 18 A (1) of the Income-tax Act for the assessment year 1952-53. On August 30, 1952, regular assessment for this year was made and a part of the tax paid in advance was thereupon found refundable to the respondent. Under the provisions of sub-s. (5) of s. 18a, as it then stood, interest at a certain rate was payable on the amount paid in advance by an assessee under this section. Rupees 14,720-14-0 were found payable to the respondent under this provision and this sum was paid sometime in September 1952. On May 24, 1953, sub-s. (5) of s. 18a was amended with effect from April 1, 1952. It is not necessary to refer to this amendment in detail and it is enough to state that under it the Government was to have paid to the respondent rs. 9,404-5-0 instead of Rs. 14,720-14-0.

(3.) On March 18, 1957, a notice was issued under s. 34 (1) (b) stating that as the Income-tax Officer had reason to believe that the respondent's income for the assessment year ending March 31, 1953, had been under-assessed and had been the subject of excessive relief, he proposed to re-assess the said income. The respondent protested but notwithstanding the protest, the re-assessment under s. 34 was, made on July 30, 1957. The order of reassessment stated: "as per the amended provisions of Section 18a (5) the assessee was entitled to interest of a much smaller amount than what has been allowed to him during the original assessment. As excessive relief has been allowed to the assessee in the original assessment u/s. 23 (3) and in order to enable me to recover the excess interest allowed action under Section 34 was taken. . . . . . . . . . . .