Law: Income Tax Act, 1922

Section: 18,18A(6),(8),29

[Income Tax Act, 1922 (XI of 1922)].....Section 18A (6), (8) -Additional tax-Penal interest-Failure to pay advance tax-Levy of additional tar by way of penalty--Formal order under sub-section (8) of Section 18A-Whether a prerequisite-Held yes- Incorporation of penal interest in assessment form I.T. 30-Whether a substitute for an order under sub-section (8)-Held no; Under sub-section (8) of section 18A if the Income Tax Officer Hinds, on making of the regular assessment, that no payment of tax had been made in accordance with the provisions of section 18A the interest call t d in the manner hid down under sub-section (6) is to be added to the tax as determined on the basis of regular assessment. It is obvious, therefore, that there has to be an order by the income tax Officer holding that advance tax in terms of Section 18A was not paid in the manner laid down in sub-section (6) of Section 18A which is to be added to the tax as determined on the basis of regular assessment. Admittedly no such order was passed in the present case. The assessment from I. T. 30 which is prescribed under rule 20 of the Income Tax Rule, as is apparent from its plain reading, cannot be order under subsection (8) of Section 18A, levying additional tax by way of penalty for non-payment of advance tax under Section 18A of the Income Tax Act. B. Income Tax Act, 1922 (XI of 1922)-Section 29-Notice of demand -Formal order under the Act- Whether condition precedent to the validity of notice of demand-Held yes. Under Section 29 a notice of demand can only be served provided tax, penalty or interest is due in consequence of an order passed under the Act. Therefore, the condition precedent to the validity of the notice of demand under Section 29 must be an order passed under the Act and the notice is merely consequential upon that order. Therefore, if there is no order under the Act no notice can be served under Section 29. In the absence of such an order there is no liability of an assessee to comply with a notice under Section 29. JUDGMENT [The Judgment of the Court was delivered by. FAKHRUDDIN G. EBRAHIM, J.]-This is an application by the Commissioner of Income Tax (Karachi) West, Karachi…

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