PULIANI D C Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner defaulted in the payment of income-tax assessed on him. THE Income-tax Officer imposed a penalty on him in accordance with Section 221, Income-tax Act, 1961. THE petitioner filed a revision before the Commissioner of Income-tax against the order imposing penalty. It was rejected. He has now filed the present petition.

(2.) WHEN the petition came up for hearing before a Division Bench, the petitioner argued that as Section 221 does not give power to impose penalty to the Income-tax Officer, specifically, the order imposing penalty is without power and invalid. He relied on Smt. Kusum Kumari v. Union of India, 1972 85 ITR 19. It is a Division Bench decision of the court. The decision squarely supports the petitioner's argument. But the Bench hearing this petition had doubts about the correctness of Smt. Kusum Kumari. So the case has been referred to a larger Bench. Hence, this petition is before us now.

(3.) THE proviso also clearly shows that an Income-tax Officer may impose penalty under Section 221, Section 246(1) and (o) are there in the Act from its very beginning. So when we read Section. 221 in conjunction with Section 246(1) and (o) and the proviso to Sub-section (1) of Section 201, there remains no doubt that an Income-tax Officer is authorised to impose penalty under Section 221. THE immediate background of Section 221 also indicates that it authorises the Income-tax Officer to impose penalty in default of payment of tax. Chapter XVII of the Income-tax Act is headed as " collection and recovery of tax ". THE chapter has got several sub-chapters. One sub-chapter is headed as " collection and recovery ". This sub-chapter consists of 13 sections (Sections 220 to 232). Section 220 fixes the date for payment of the tax due. Tax is to be paid within 35 days of the service of the notice of demand on the assessee. THE proviso to Sub-section (1) of Section 220 indicates that the power under the proviso is to be exercised by the Income-tax Officer. Section 222 requires a certificate to be sent to the Tax Recovery Officer for collection of the arrears of tax. THE certificate is to be issued by the Income-tax Officer. Section 225 provides for stay of proceedings for recovery of tax and the amendment or withdrawal of the certificate by the Income-tax Officer. Section 226 states that notwithstanding the issue of a certificate to the Tax Recovery Officer under Section 222, the Income-tax Officer may recover the tax by any one or more of the modes provided therein. Section 228 provides for the recovery of tax from a person in Pakistan on the certificate issued by the Income-tax Officer. Section 229 provides that penalty shall also be recovered in the manner provided for the recovery of tax. Section 230 empowers the Income-tax Officer to take action in a certain contingency. Section 230A also empowers the Income-tax Officer to take certain action in a certain other contingency. Section 232 authorises the Income-tax Officer to institute a suit for recovery of tax. It is only Section 221 which does not expressly authorise the Income-tax Officer to impose penalty. But its immediate context would suggest that Parliament intended to authorise the Income-tax Officer to impose penalty.