TaxTMI 
TaxTMI 
1965 (12) TMI 19
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....averred that the petitioner did not object to the date of hearing which was fixed on September 19, 1964. So an order, exhibit P-1, dated September 19, 1964, has been passed reading as under: " I find from my records that interest is due from you under section 217 at the rate of 4 per cent. in respect of the assessment for the year 1954-55 as follows: Rs. nP. Amount on which interest is chargeable 18,134 00 Period 1-1-1954 to 26-4-1962 Rate 4 per cent. Amount of interest 4,822 78 This should be paid as shown in the demand notice. " It is the above order that is challenged in this writ application. Though the order of assessment has been passed a few days after the Income-tax Act, 1961, became law and, though the order, exhibit P-1, ....
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....ng to the assessment that was concluded by exhibit P-2 order. The question as to whether interest under section 18A(6) must be charged depended on the exercise of discretion vested in the Income-tax Officer by the fifth proviso to that sub-section and the further questions of fact as to whether the conditions, all or any of them mentioned in rule 48 of the Indian Income-tax Rules, 1922, have been satisfied. It is necessary to read sub-section (6) of section 18A and the fifth proviso to that section. " 18A. (6) Where in any year an assessee has paid tax under sub-section (2) or sub-section (3) on the basis of his own estimate, and the tax so paid is less than eighty per cent. of the tax determined on the basis of the regular assessment, so ....
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....5th of March, in circumstances which could not be foreseen. (5) Any case in which the Inspecting Assistant Commissioner considers that the circumstances are such that a reduction or waiver of the interest payable under section 18A(6) is justified." From the mere fact that interest has not been charged under section 18A(6), it is said, it cannot be inferred or concluded that the Income-tax Officer has committed a patent error. The argument is that it can quite as well be that he exercised his discretion to waive the interest conferred on him by the proviso to section 18A(6) and the question as to whether the circumstances mentioned in rule 48 referred to above have or have not been satisfied, it is said, cannot be determined without a proc....
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....x Officer had a discretion in charging interest or in waiving it. It was, therefore, held that it was not possible to conclude that there was an error apparent on the face of the record from the mere fact that interest had not been charged. It is no doubt true that the Supreme Court observed : "The Attorney-General contended that in any event there was nothing to show that the Income-tax Officer had purported to exercise his discretion when he passed the order of assessment and did not impose any liability for payment of interest under section 18A(6). That may be so. But the case of the assessee did fall within the terms of rule 48(1) and the Income-tax Officer must in law be bound to consider whether he was entitled to reduction or waive....
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....ed in favour of the assessee. Where it is not shown that rule 48 or any part of it has been satisfied, the Income-tax Officer would have had no discretion and the order omitting to charge interest under section 18A(6) would, therefore, be patently erroneous. Before dealing with this argument I may also refer to the decision in Lata Mangeshkar v. Union of India. It is not clear from the report in that judgment that the assessee satisfied all or any of the conditions prescribed by rule 48(1). Even so, the principle of the decision in M. K. Venkatachalam, Income-tax Officer v. Bombay Dyeing and Manufacturing Co. Ltd. was applied and, if I may say so with respect, rightly. Apart from the above, if it is necessary to conduct an investigation t....