Advance-tax interest waiver and revisionary jurisdiction fail where assessment delay is not attributable to the assessee.

Where an assessee not previously assessed failed to file an advance-tax estimate, interest could arise under section 18A, but Rule 48 empowered the Income-tax Officer to reduce or waive that interest when assessment was completed more than one year after the return and the delay was not attributable to the assessee. On the stated facts, the assessment was delayed for several years and the delay was not shown to be the assessee's fault, so the Income-tax Officer was treated as having waived the penal interest. The Commissioner could not revise the assessment under section 33B without a jurisdictional that the delay was attributable to the assessee, which was absent.

---

---

Issues: Whether the Income-tax Officer must be deemed to have exercised discretion to waive penal interest under the advance tax provisions, and whether the Commissioner had jurisdiction under section 33B of the Indian Income-tax Act, 1922, to revise the assessment order.

Analysis: The assessment related to an assessee not previously assessed, so the obligation to file an advance tax estimate under section 18A(3) applied and, on default, interest under section 18A(8) read with section 18A(6) could arise. Rule 48 of the Indian Income-tax Rules, 1922, however, empowered the Income-tax Officer to reduce or waive such interest in specified situations, including where the assessment was completed more than one year after filing of the return and the delay was not attributable to the assessee. On the facts, the assessment was made several years after the return, and the delay was not shown to be due to the assessee. In these circumstances, the order could not be revised under section 33B unless the Commissioner founded his jurisdiction on a finding that the delay in assessment was attributable to the assessee, which he did not do.

Conclusion: The answer was in the affirmative. The Tribunal was right in holding that the Income-tax Officer must be deemed to have waived the penal interest, and the Commissioner had no jurisdiction under section 33B to set aside the order on the footing adopted by him.

Final Conclusion: The reference was answered in favour of the assessee, and the Commissioner's revisionary order was not sustainable on the grounds recorded by him.

Ratio Decidendi: Where Rule 48 permits waiver or reduction of advance-tax interest and the delay in assessment is not shown to be attributable to the assessee, the Commissioner cannot invoke revisionary power under section 33B without the requisite jurisdictional for disturbing the Income-tax Officer's order.

---