Law: Income Tax Act, 1922

Section: 18,18A(1),18A(2)

Income tax Act (XI of 1922)--Ss. 18 A (1) (&) 18 A(2) Advance tax Default Penalty-Sections 18 A(1) & 18 A (2) are independent of each other Assessee sent his estimate under S. 18 A(2) that his income was below Rs. 25,000 and lie was not required to pay any advance tax under S. 18 A (1)¬If assessee's income was below Rs. 25,000, he by filing his estimate of quarterly income by due date, held, substantially complied with provision of S. 18 A(2) Fact that assessee did not mention figure of his estimated income for two quarters would not make him a defaulter Assessee caused no prejudice io department for, his income was otherwise below Rs. 25,000 and provisions of S. 18 A (1) were not attracted income tax Appellate Tribunal was therefore right in holding that there was no default and there was not even a technical default on part of assessee in circumstances. JUDGMENT NAIMUDDIN, J. This is an application under section 66(2) of the Income tax Act, 1922 filed by the Commissioner of Income tax (Central Zone), Karachi, referring the following question of law said to arise out of the order, dated 22 7 1975, passed by the Income tax Appellate Tribunal, Karachi Bench, Karachi : "Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the assessee did not commit any default under section 18(A) (1) and that the penalty levied on the assessee was improper." 2. The facts` giving rise to this reference are that the respondent was assessed under section 23(4) of the Act for the assessment year 1971 72, on an income of Rs. 1,87,656 on 23 11 197. Accordingly, the respondent was liable to pay advance tax under section 18 A(1) of the Act for the assessment year 1973 74, but he filed estimates of total income on 14 9 1972, and 14 12 1972, disclosing his income to be below Rs. 25,000. He again filed an estimate of income on 13 3 1973, showing a loss of about 1,00,000. He ultimately on 15 7 1973, filed a regular return under section 22(1) of the Act, showing a loss of Rs. 94,895. 3. The Income tax Officer, Company Circle X, Karachi, issued a showcause notice to the assessee to show cause why penalty should not…

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