LAWS(KAR)-1958-1-5

ESTHURI ASWATHAIAH Vs. INCOME TAX OFFICER KOLAR CIRCLE

Decided On January 21, 1958
ESTHURI ASWATHAIAH Appellant
V/S
INCOME-TAX OFFICER, KOLAR CIRCLE Respondents

JUDGEMENT

(1.) This petition arises out of an order of imposition of penalty made by the Income-tax Officer under section 46 of the Income-tax Act. The petitioner before us was assessed by the Income-tax Officer for the year 1951-52 on the 15th March, 1956. The income assessed was Rs. 1,91,017 and the tax demanded from the petitioner on such assessment was Rs. 67,383-12-0, and it was made payable on or before 20th April, 1956. Against that order of assessment the petitioner filed an appeal on 5th April, 1956, to the Appellate Assistant Commissioner. After having filed the said appeal, the petitioner requested the Income-tax Officer to grant him time to pay the amount till the disposal of the appeal. That prayer was refused by the Income-tax Officer on 28th March, 1956. The petitioner applied on 5th April, 1956, to the inspecting Assistant Commissioner to grant him time to pay till the disposal of the appeal. The Inspecting Assistant commissioner give time till 1st June, 1956. On 25th May, 1956, the petitioner again applied to the Commissioner of Income-tax to grant him time to pay the amount of tax assessed till the disposal of the appeal. A copy of the said petition was sent by the petitioner to the Income-tax Officer. It is against that order that the present petition was filed on 19th June, 1956. After this petition was admitted, an order staying the imposition of the said penalty was made by this court. On 30th April, 1957, the main appeal against the assessment order filed by the petitioner came to be decided by the Appellate Assistant Commissioner. The income assessed by the Income-tax Officer was reduced to Rs. 54,017 and the tax payable was reduced to Rs. 4,569-13-0. I should have mentioned that the petitioner at the time when he was assessed by the Income-tax Officer admitted his liability for the income of Rs. 25,083 and on such admission he paid a sum of Rs. 1,829-5-0 which includes the amount he had paid by way of advance tax.

(2.) The learned advocate appearing for the petitioner contended before us that under section 45 of the Income-tax Act, the Income-tax Officer, where an appeal has been filed against his order of assessment, has to exercise his discretion as to whether or not he would still treat the assessee as being in default and he must not exercise that discretion arbitrarily. In this case, the learned advocate contended before us, that the Income-tax Officer did not exercise his discretion under the said section; and even if it be held that he did exercise his discretion, the same was exercised arbitrarily. On these grounds the learned advocate contended before us that no penalty could be imposed under section 46 of the Income-tax Act and the order imposing such penalty should be quashed.

(3.) Before I deal with these contentions of the learned advocate for the petitioner, it would be necessary to set out the relevant portions of sections 45 and 46 of the Income-tax Act. Section 45 inter alia provides as follows :