Law:

Section:

Section 221, read with section 271(1)(c) of the Income-tax Act, 1961 [Corresponding to section 46, read with section 28(1)(c) of the Indian Income-tax Act, 1922] - Collection and recovery of tax - Penalty payable when tax in default -Assessment year 1952-53 - Penalty under section 28(1)(c) of 1922 Act was imposed on assessee - Since assessee defaulted to pay said amount of penalty, a further penalty was imposed upon him - For realization of aforesaid sums, proceedings were initiated by respondent- ITO under State Revenue Recovery Act - Whether imposition of penalty was not mode of recovery of tax under section 46 of 1922 Act, and, therefore, ITO was acting without jurisdiction in imposing penalty for default in payment of penalty already imposed - Held, yes FACTS The petitioner-assessee was assessed to income-tax. A penalty was also imposed upon him under section 28(1)(c) of the 1922 Act for wilful manipulation of accounts and suppression of income. The tax assessed was cleared by the petitioner in instalments, but because he defaulted in paying the penalty amount, a notice of demand under section 29 was issued and a further penalty was imposed against him. For realization of the two sums, proceedings were initiated by the first respondent, the ITO, through the third and second respondents, the District Collector and Tahsildar respectively, under the State Revenue Recovery Act (VII of 1951). On writ, the petitioner contended that the State Recovery Act was intended only for recovery of State revenues and could not be utilised for the recovery of central revenue, e.g., income-tax dues, and the procedure adopted by the respondents for the realization of the tax dues was accordingly illegal and without jurisdiction. The petitioner also canvassed the validity of the imposition under the Act of the penalty for non-payment of a penalty. HELD Section 46(2) of the 1922 Act does not prescribe the machinery which the Collector has to employ for purpose of recovery. There is also no restriction or qualification in the use of the expression "Collector" whether with reference to the agency which employs him or otherwise. The object of the provision would appear to be to…

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