Advance-tax demand defects do not nullify interest when assessee's own estimate governs and waiver remains discretionary.

A defect in the advance-tax demand notice did not invalidate interest under Section 18A(6) of the Income-tax Act, 1922, because the assessee's own estimate and actual deposit governed the levy and no prejudice was shown. The earlier demand figure ceased to be relevant once the assessee made his own estimate and paid tax on that basis, so the interest demand stood. The fifth proviso to Section 18A(6) and Rule 48 conferred only discretionary power to reduce or waive interest, and no enforceable entitlement was established. The challenge to the interest levy therefore failed, and the writ petition was dismissed with costs.

---

---

Issues: (i) Whether the demand notice issued under Section 18A(1) of the Income-tax Act, 1922 was invalid so as to affect the levy of interest under Section 18A(6) of that Act. (ii) Whether the assessee was entitled to reduction or waiver of interest under the fifth proviso to Section 18A(6) of the Income-tax Act, 1922 read with Rule 48 of the Income-tax Rules, 1922.

Issue (i): Whether the demand notice issued under Section 18A(1) of the Income-tax Act, 1922 was invalid so as to affect the levy of interest under Section 18A(6) of that Act.

Analysis: The alleged defect in the advance-tax demand was not shown to have caused prejudice, and the petitioner did not establish the correct substitute figure. After the petitioner made his own estimate and deposited tax on that basis, the original figure in the demand notice ceased to have relevance for calculating interest. The interest was payable on the difference between the assessed income and the advance tax actually deposited, and any inaccuracy in the earlier demand notice did not nullify the levy.

Conclusion: The demand notice was not shown to be void or to invalidate the interest charged; the objection failed.

Issue (ii): Whether the assessee was entitled to reduction or waiver of interest under the fifth proviso to Section 18A(6) of the Income-tax Act, 1922 read with Rule 48 of the Income-tax Rules, 1922.

Analysis: The proviso conferred only an enabling discretion on the Income-tax Officer. There was no material showing that a request for waiver had been made, that the statutory conditions were established in the petitioner's favour, or that the officer ignored the provision. In the absence of a mandatory requirement and in view of the discretionary nature of the power, judicial interference was not warranted.

Conclusion: No enforceable right to waiver or reduction was established; the objection failed.

Final Conclusion: The challenge to the levy of interest under the advance-tax provisions was rejected, and the writ petition was dismissed with costs.

Ratio Decidendi: A defect in the advance-tax demand notice does not by itself invalidate interest under Section 18A(6) where the assessee's own estimate and deposit govern the levy, and a proviso conferring discretionary power to waive interest creates no mandatory entitlement absent proof of statutory conditions and non-application of mind.

---