LexTHE INCOME-TAX OFFICER CIRCLE II MADURA, AND ANOTHER versus M. R. VIDYASAGAR
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2 S.C.R.
SUPREME COURT REFORTS
THE INCOME-TAX OFFICER CIRCLE II
MADU!{A, AND ANOTHER
v.
M. R. VIDYASAGAR
613
(B. P. SINHA, c. J., J.L. KAPUR. M. H!DAYATULLAJI,
J.C. ~HAH and J. H.. MunHOLKAR, JJ. )
Income Tax-Payment of advance tax-Assessed income
exceeded the estimate-Levy of interest-Power to reduce or
waive- -When cc,uld be exercised-- Indian Income-tax Act, 1922
(11 of 1922), s. 18A (6) fifth proviso-Indian Income•tax
(Amendment)
Act, 1953 (22j of 1953), s. 13-Income-tax
Ruks r.48.
The Income-tax Officer, Madura, issue 1 notice under
s. 18A (I) of the Indian Income-Tax Act, 1922, for payment
of advance tax. R, the then manager of the Hindu Undivided
family availed of the option to submit a l'evised estimate for
the years 1946-47 and 1948-49. The assessment ofthese
two years were completed respectively in November, 19)0 and
February, 1951, as the total incom~ a:;je;sed far exceeded the
estimate submitted by R, th: Ino Hll!·ti< Officer ordered the
respondent, the legal representative of R, ti;l P"Y the interest
under s. IBA (6) of the •Act. On appeal,
the Income-tax
Appellate Tribunal reduced the income and. the Income-tax
Officer in giving effect to the said order reduced the interest
and c.<llect upon the respondent to make payment.
The
respondent asked the Income-tax Officer not to levy inter·
e,t under s. ISA 16), submitting that the levy was illegal and
unju'1ified, alternatively he requested that the interest be
waived by virtue of the powers vested on the Income-tax
Officer under proviso 5 to•· 18'\ (6) which was added by
s. 13 of Act 25 of l9j3, with retrospective effect from April
1952. The Income-taJ< Officer and the Inspection Assistant
Commi,,ioner declined
t~ accede to the request. The res-
pondent then moved the High Court at Madras for a writ
under Art. 226 cancelling the levy of interest on the ground
among ochers that refusal by the Revenue authorities to cancel
the levy was arbitrary and not based on any judicial exercise
of the discretion vested by the Act.
The High Court up-
held the plea, ordered the Income tax Officer to decide whe-
ther the respondent had made out a case for the exercise
of the discretion. The only question in the appeal before the
Supreme Court was whether benefit of the said 5th proviso
to s. I SA (6) may be granted in respect of asse•smcnts of in-
come which were . completed by the Income-tax Officer be-
fore Ap.ril 1952.
lS62
n.n.-"""'
0 .Jur Cfrtj< II
Madut~
v.
JI. B. V~,aMl.far
SWJ.
614
SUPREME OOURT REPORTS [1962] SUPP.
Htld, that the jurisdiction under 5th proviso of s. IBA
(6) of the Income-tax Act may be exercised by the income-
tax Officer in all cases which wrre pending on April I, 1952
before him or any superior authority having under the Act
power to modify the assessment of income.
C!v:IL APPELLATE JURISDICTION : Civil Appeal
Nos. 545 and 546 of 1900.
Appeals from the judgment and order dated
Augmt 13, 1954, of the Madras High Court in
Writ Petitions Noe. 743 and 7-!S of J 95!.
K. N. Rajagopal Sastri and P. D. Menon, for
the appellants.
The respondent did not appear.
19.62. January 17.-The Judgment of the coun
was delivered by
SHAH, J.-'Ihcse are two appeals with certi-
ficates of fitness granted by the High Court of
Judicature at Ma.drae against certain orders passed
in Writ Petitions uu<ler Art. 226 of the Colllltitution.
One Ram1111wami Iyer-father of the respon-
dent-Wiil' aeeCBl!ed to incomP-tax in the status of a
Hindu Undivided Family. Ramaswami Iyer died
in 1949 and the respondent M.R. Vidyasagar
became the manager of the family.
The family
W&8 a partner through its man~er in a firm styled
"The Madura Knitting Compauy", and the share in
the profits of the partnership which wae registered
under the Indian Income· tax Act W&B th\l principal
source of its aaseseable income.
Under s. ISA of
the Indian Inoome-tax Act, the Hindu undivided
family was liable to pay advance tax for each of
the &BBCBSment years HJ46-4 7, I 94 7-4S and l!J4S-49.
The Income-tax (Jffice1·, Madura, fseued notices
under s. UiA (1) of the Indian Income.tax Act for
payment of &dvanoe tax on the basis of the preced-
ing year's income. It wus open to the a.i;sessee to
snbmit a revised estimate of hie inoomo under s. ISA
(2) in respect of the year in question and Rama-
1wami Iyer-who w&B at the material time the
2 S.C.R.
SUPREME COURT REPORTS
615
manager-availed himself of the option to submit
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