Income-tax recovery machinery: penalty treated as additional tax, enabling consequential liability for non-payment.

A penalty imposed under section 28(1)(c) of the Income-tax Act, 1922 was treated as additional income-tax for recovery purposes, so default in payment could attract section 46(1). Section 46(1) was construed as a collecting provision to be read liberally, and the coercive recovery machinery for public dues was held to extend to consequential liability arising from non-payment of the penalty already imposed. On that basis, imposition of penalty under section 46(1) for non-payment of the earlier penalty was upheld as valid and within jurisdiction, and the recovery challenge failed.

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Issues: Whether penalty under section 46(1) of the Income-tax Act, 1922 could be imposed for non-payment of penalty levied under section 28(1)(c) of that Act.

Analysis: Penalty imposed under section 28(1)(c) was treated as additional tax forming part of the machinery for assessment of tax liability. On that footing, default in payment of such penalty could attract section 46(1), which was construed as a collecting provision requiring liberal interpretation. The coercive process authorised for recovery of public dues was also relied upon to support the view that the provision covered liability arising from non-payment of the penalty already imposed.

Conclusion: The imposition of penalty under section 46(1) for non-payment of penalty levied under section 28(1)(c) was held to be valid and within jurisdiction.

Final Conclusion: The writ petition failed because the challenged recovery action was upheld as a lawful exercise of the income-tax recovery machinery.

Ratio Decidendi: For the purposes of recovery, a penalty imposed under section 28(1)(c) is to be treated as additional income-tax, and section 46(1) may be applied to impose consequential liability for its non-payment.

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