Law: Income Tax Act, 1922

Section: 18,66(1),18A(6),(8),29

(a) Income-tax Act (XI of 1922)-- --S. 66(1)--Reference--Plea neither raised by applicant before Tribunal nor arising out of order of the Tribunal, held, could no, form subject-matter of reference. (b) Income-tax Act (XI of 1922)----Ss. 18-A(6) and (8) & 29--Assessment order contained no reference to any default in depositing of advance income-tax amount in terms of S. 18-A(6) nor there was any reference to I.-T.30--Income-tax Officer, held, could not add any amount of penal interest under S.18-A(6) without first holding in the relevant assessment order that the assessee had defaulted in depositing of income-tax amount in terms of S.18-A(6). In the assessment order there was neither any reference to any default in depositing of advance income-tax amount in terms of S.18-A(6) of the Act nor there was any reference to I.T.30. Sub-section (8) of section 18-A of the Income-tax Act envisages conscious application of mind by an Income-tax officer at the time of passing of the assessment order on the question, whether there was any default in depositing of advance Income-tax in terms of above-quoted subsection (6) of section 18-A of the Act. If the Income-tax Officer comes to the conclusion that there was default, in that event, he can add the penal interest by virtue of the subsection (8) of section 18-A of the Act in the manner provided in subsection (6) in the assessment order. Section 29 which provides issuance of notice of demand also presupposes existence of an order in pursuance of which a demand notice is to be issued. There is to be an order by the Income-tax Officer holding that advance tax in terms of section 18-A was not paid in the manner laid down in subsection (6) of section 18-A before adding any amount of penal interest under subsection (8) of section 18-A. An Income-tax Officer cannot add any amount of penal interest under section 18-A(8) without first holding in the relevant assessment order that the assessee has defaulted in depositing of income-tax amount in terms of above section 18-A(6) of the Act. Commissioner of Income-tax, Karachi West, Karachi v. Malik Wilayat Hussain and Sons Ltd., Quetta 1987 P T D 249 ref. Schazoo Laboratories Ltd. v:…

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