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PUNJAB & HARYANA HIGH COURT
Roshan Lal Kuthiala
Versus
Income-tax Officer, Special Investigation Circle, Ambala
Civil Writ No. 312 of 1963,
Decided On : MAY 29, 1964
INCOME TAX - Advance Tax - Demand Notice - Legality - Provisional Assessment - Validity - Payment of Advance Tax - Date of Payment - Provisional Assessment - Effect on Advance Tax Liability - Conduct of Petitioner - Interference by Court.
Fact of the Case:
The petitioner challenged the legality of an advance tax notice issued under section 210 of the Income-tax Act, 1961, claiming it was based on a provisional assessment and not a regular one. The petitioner also argued that the demand for the entire advance tax by March 1, 1963, contravened the proviso to section 211(1) of the Act, and that after the filing of the writ petition, the provisional assessment for the financial year 1962-63 rendered the impugned notice infructuous.
Finding of the Court:
The court held that the order dated December 31, 1962, was a regular assessment and not a provisional one, as the Income-tax Officer had determined the petitioner's total income and levied tax accordingly. The court also found that the department was justified in changing the date of payment of the tax from March 1, 1963, to March 15, 1963, to avoid unnecessary controversy. Furthermore, the court held that the making of the provisional assessment did not ipso facto invalidate the advance tax notice, as the advance tax notice is issued during the financial year while the provisional assessment is made during the assessment year.
Issues: 1. Whether the advance tax notice was based on a provisional assessment and not a regular one? 2. Whether the demand for the entire advance tax by March 1, 1963, contravened the proviso to section 211(1) of the Act? 3. Whether the provisional assessment for the financial year 1962-63 rendered the impugned notice infructuous?
Ratio Decidendi: 1. The court relied on the provisions of sections 141 and 143 of the Income-tax Act, 1961, to distinguish between provisional and regular assessments. It held that the order dated December 31, 1962, was a regular assessment as the Income-tax Officer had determined the petitioner's total income and levied tax accordingly. 2. The court found that the department was justified in changing the date of payment of the tax from March 1, 1963, to March 15, 1963, to avoid unnecessary controversy, as there was no provision of law or decided case to support the petitioner's contention that the department could not change the date of payment after issuing the demand notice. 3. The court held that the making of the provisional assessment did not ipso facto invalidate the advance tax notice, as the advance tax notice is issued during the financial year while the provisional assessment is made during the assessment year.
Final Decision: The court dismissed the petition, holding that the advance tax notice was valid and that the petitioner's conduct in delaying the payment of tax warranted no interference by the court.
1. This is a petition under articles 226 and 227 of the Constitution filed by Roshan Lal Kuthiala challenging the legality of a notice dated January 30, 1963, issued by the Income-tax Officer for the payment of advance tax under the provisions of section 210 of the Income-tax Act, 1961.
2. According to the allegations of the petitioner, on December 31, 1962, the Income-tax Officer, Special Investigation Circle, Ambala, respondent, had passed an assessment order for the year 1958-59 purporting to be under section 23 (3)/34 of the Indian Income-tax Act, 1922, and had issued a demand notice for the payment of Rs. 2,66,794.32 nP. on an income of about Rs. 3,13,630. On January 30, 1963, the said Income-tax Officer issued a notice for the payment of advance tax under section 210 of the Income-tax Act, 1961, requiring the petitioner to pay by March 1, 1963, a sum of Rs. 2,32,081 determined to be payable for the financial year 1962-63 on the basis of the assessment order dated December 31, 1962. Since this notice was illegal, the petitioner made representations to the Income-tax Officer and the Commissioner of Income-tax, but without any result. This led to the filing of the present writ petition on February 28, 1963.
3. In the return filed by the respondent, two preliminary objections have been raised. Firstly, it was stated that the petition was misconceived. The payment of advance tax on income during the relevant year of account was the statutory liability of an assessee and failure to pay the same visited him with statutory consequences. The respondent had merely quantified the amounts payable by the assessee with reference to the last completed assessment. If the assessee thought that that figure was higher than what was justified on his actual income in the relevant accounting period, he had the statutory remedy of giving his own estimates and making payment of advance tax for the period accordingly. The petitioner had, therefore, effective remedies open to him under the Income-tax Act. Secondly, it was mentioned that the object of the writ petition seemed to be to put off the petitioners statutory liability. A valid assessment having been completed, a lawful demand had been made by the respondent. The petitioner had his remedies under the Income-tax Act against the assessment. The remedy resorted to by the petitioner by invoking the jurisdiction of this court on the extraordinary side was not open to him. On the merits, it was stated that the total income of the petitioner was assessed at Rs. 3,44,668 and not Rs. 3,13,630, as mentioned by him. It was further mentioned that the advance tax for the period in question was demanded by the respondent by an earlier order dated August 18, 1962, as well. That order was subsequently revised on January 30, 1963, as a result of the completion of the assessment for the year 1958-59. It was admitted that the petitioner had made representations to the Commissioner of Income-tax, but the latter had declined to interfere in the matter. It was asserted that the fresh notice of demand issued by the respondent on January 30, 1963, was perfectly bona fide, legal and within jurisdiction and did not in any way infringe any rights of the petitioner, fundamental or otherwise.
4. On April 3, 1964, the petitioner put in an application (Civil Misc. No. 947 of 1964) under section 151, Civil Procedure Code, stating that, after the filing of the writ petitioner, the respondent allowed the petitioner to send by December 31, 1963, the return of his income for the assessment year 1963-64. A return in the prescribed form declaring an income of Rs. 1,00,000 was duly filed with the respondent by the aforesaid date. The respondent had, by virtue of his order dated January 15, 1964, passed under section 141 of the Income-tax Act, 1961, made a provisional assessment of the tax payable by the petitioner. In pursuance of this assessment, the respondent had created a demand of Rs. 33,900.23 nP. for which a not
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