TaxTMI 
TaxTMI 
1980 (12) TMI 41
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder section 33B of the Indian Income-tax Act, 1922, to revise the order of the Income-tax Officer ? " The question referred to us relates to the assessment year 1961-62, when the assessee was assessed on a total income of Rs. 86,308 and a tax demand of Rs. 38,939.60 was raised. The Commissioner, on examining the records of the case, was of the view that as the assessee had omitted to pay advance tax he was liable to pay the same under s. 18A(8) of the Act, and accordingly a notice under s. 33B of the Act was issued on account of the fact that the ITO had omitted to levy penal interest under s. 18A(8). The assessee's claim was that the returns had been filed for the earlier years and if the assessments had been made in proper time, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mount by Rs. 2,500 and he is required to pay instalments of tax on the said estimate. This is provided in sub-s. (3) of s. 18A. Sub-s. (8) provides that when a regular assessment is made and the ITO finds that no payment of tax has been made, then interest in accordance with sub-s. (6) is to be added to the tax as determined for the payment of the regular assessment. In the present case, the assessee had not previously been assessed, but returns of income had been filed for some earlier years which were awaiting assessment. No doubt, the assessee was a person who had not been hitherto assessed within the meaning of sub-s. (3) of s. 18A. Therefore, the assessee was bound to file an estimate and failure to file the same would make the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment was made on 26th March, 1966, the assessment year in question was 1961-62. The return was filed on 22nd December, 1961. It, therefore, took the ITO four and a half years to make the assessment order. If the penal interest clause applies, the interest is payable from the date of the default up to the date of the assessment. Hence, interest for four and half years would have to be included if penal interest had been charged. It would not be attributable to the assessee. It is nobody's case that the delay in making the assessment was on account of any default by the assessee. The other part of the rule which might apply to the assessee is the 5th case where the IAC can reduce or waive the interest if it is a justified case. As would ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to waive the penal interest. In other words, is a specific order necessary, or can the waiving of the penalty be done without saying anything. It appears to us that this was a very clear case indeed. The assessment took place long after the return was filed. If the penal interest was to be, imposed, it would also be imposed for the period during which the income-tax assessment remained pending before the ITO. In such circumstances, even if the ITO had said that he does not waive the penal interest, or did not waive the same, the assessee would have a good cause to challenge the order. In fact, this is a case in which the interest could have been imposed only if the delay in the assessment proceedings was attributable to the assessee. I....