Law: Income Tax Act, 1922

Section: 29,31,45,46(1)

[Income-Tax Act. 1922 (XI Of 1922)].....Sections 29, 31, 45, 46 (1) - Notice of demand--Assessment order made subject of appeal- Whether operates as slay of recovery proceedings in pursuance of demand notice under Section 29-HeId no-Assessment modified in appeal allowing reduction in quantum of income-Demand notice in pursuance of original assessment order Whether ceases to operate Held yes-Fresh demand notice consequent upon appellate order- Whether necessary Held yes. The Income Tax Officer in completing the assessment under Section 23 of the Act is required to determine the sum payable by the assessee. On appeal the Appellate Assistant Commissioner or the Tribunal, under Section 33 according as the case may be, reduce, enhance, annul or set aside the assessment and direct the Income Tax Officer to make a fresh assessment. A notice of demed is issued under Section 29, after the income is computed and the tax determined. This section inter alia lays down that when any tax is due in consequence of any order passed under or in pursuance of the Act, the Income Tax Officer shall serve upon the assessee a notice of demand specifying the sum so payable. This in itself connotes that a fresh notice of demand may be issued in pursuance to or as a result of on order passed in appeal in modification and super-session of the original order of assessment. In this connection Section 45 of the Act lays down that any amount specified as payable in a notice of demand under Section 29 or an order under Section 31 or Section 33, shall be paid within the time mentioned in the notice of demand or order and any assessee failing to pay shall be deemed to be in default. Sub-section (I) of Section 46 further provides that when an assessee is in default in making a payment of tax, the Income Tax Officer may in his discretion direct that, in addition to the amount of the arrears a sum not exceeding that amount shall be recovered from the assessee by way of penalty. There is no, denying the fact that an order passed by the Income Tax Officer imposing the penalty under Section 46 (1) of the Act enures and holds good against the assessee in default of the demand notice served on him in…

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