Hindu undivided family advance-tax interest survives death of karta, but waiver discretion may be exercised after assessment.

Interest under section 18A(6) was treated as a statutory, compensatory liability chargeable to the Hindu undivided family itself, so the death of the karta who filed the advance-tax estimate did not extinguish the demand or attract section 24B. The proviso to section 18A(6) read with rule 48 conferred a discretionary power to reduce or waive interest, and that discretion was not confined to the period before assessment. Failure to genuinely consider the relevant circumstances and exercise that discretion could vitiate the levy, leaving the matter for fresh consideration by the Income-tax Officer.

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Issues: (i) Whether interest under section 18A(6) of the Income-tax Act could be levied against a Hindu undivided family after the death of the karta who had filed the advance-tax estimate, and whether section 24B affected such liability; (ii) whether the power to reduce or waive interest under the proviso to section 18A(6) read with rule 48 of the Income-tax Rules could be exercised after completion of the assessment and whether failure to consider that discretion vitiated the levy.

Issue (i): Whether interest under section 18A(6) of the Income-tax Act could be levied against a Hindu undivided family after the death of the karta who had filed the advance-tax estimate, and whether section 24B affected such liability.

Analysis: The liability to interest under section 18A(6) was treated as a statutory and compensatory liability, not a penalty. The assessee remained the Hindu undivided family, which continued as the taxable unit despite the death of the karta and the change in management. Section 24B, which concerns the legal representative of a deceased assessee, did not govern a case where the assessee itself was the Hindu undivided family and not the deceased karta personally.

Conclusion: The levy was not invalid merely because the karta had died, and the interest could survive against the Hindu undivided family.

Issue (ii): Whether the power to reduce or waive interest under the proviso to section 18A(6) read with rule 48 of the Income-tax Rules could be exercised after completion of the assessment and whether failure to consider that discretion vitiated the levy.

Analysis: The proviso conferred a discretionary power on the Income-tax Officer, regulated by rule 48, and neither the proviso nor the rule imposed a time limit requiring the power to be exercised before completion of assessment. Rule 48(5) showed that the discretion and supervisory power could be considered even after assessment. Since the authorities did not genuinely exercise or review the discretion on the relevant circumstances, the levy stood vitiated.

Conclusion: The failure to exercise the statutory discretion under the proviso and rule 48 invalidated the levy of interest.

Final Conclusion: The petitions succeeded because the impugned interest demand was set aside for non-exercise of the statutory discretion to waive or reduce interest, and the matter was left for fresh consideration by the Income-tax Officer.

Ratio Decidendi: In a Hindu undivided family assessment, death of the karta does not terminate the assessee's liability to statutory advance-tax interest, but the discretion to waive or reduce such interest under the governing proviso and rules may be exercised even after assessment, and failure to consider that discretion vitiates the levy.

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