RAJAH VELUGOTI SARVANGA KUMARA KRISHNA YACHINDRA BAHADUR VARU, RAJAH OF VENKATAGIRI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, Madras Branch, referred to the High Court of Madras, under Sec. 66 (1) of the Indian Income-tax Act, the following two questions of law:-

(2.) The case has been transferred to this Court after its constitution.

(3.) The undisputed facts that gave rise to the Reference may be briefly stated:- For the assessment year 1948-49, the assessee was assessed to income-tax in a sum of Rs.2, 19, 541.002-0 and was directed to pay the same on or before 5/3/1949. On 8/3/1949 he sent a cheque for Rs.25,000.00 and prayed for the payment of the balance in instalments of Rs.25,000.00 per mensem. On 11/3/1949, the Income-tax Officer refused to grant time as the assessee made default in the payment of the tax. On 19/3/1949, the Income-tax Officer levied a penalty of Rs.2,000.00 and called upon the assessee to pay up the tax and penalty by 25/3/1949. After giving some extension of time for the payment of the balance, the Income-tax Officer on 28/3/1949 levied a further penalty of Rs.25,000..00 On 25/4/1949 the assessee sent to the Income-tax Officer a cheque for Rs.25,000.00 towards penalty and a further cheque for Rs.30,000.00 in part payment of the tax due. The Commissioner of Income-tax, Madras, by his Order dtd. 2/5/1949 permitted the assessee to pay the balance of tax in monthly instalments of Rs.40,000..00 On 21/4/1949, the assessee filed two appeals to the Appellate Assistant Commissioner, "A" Range, Madras, against the said penalties of Rs.2,000.00 and Rs.25,000.00 imposed on him under Sec. 46 (1) of the Income-tax Act.