Law: Income Tax Act, 1922

Section: 46(1)

Section 246, read with sections 211 and 221, of the Income-tax Act, 1961 [Corresponding to section 30, read with sections 18A(1) and 46(1), of the Indian Income-tax Act, 1922] - Assessment year 1957-58 - Whether where ITO imposed penalty under section 46(1) of 1922 Act on assessee-company on its failure of not depositing advance tax demanded under section 18A(1) of 1922 Act, no appeal to AAC against order of such penalty was maintainable unless tax demanded was paid by assessee - Held, yes FACTS For the assessment year 1957-58, the ITO issued a notice to the assessee for payment of advance tax under section 18A(1) of the 1922 Act. As no payment at all had been made by that date the ITO imposed a penalty under section 46(1) of the 1922 Act. The assessee appealed to the AAC against this order and although the AAC had been informed that no payment had been made towards the tax, even up to the date when he decided the appeal, he proceeded to go into the merits of the appeal, and, finding that the demand as advance payment of tax made by the ITO was illegal, accepted the appeal and set aside the penalty. On appeal, the Tribunal held that the AAC could not lawfully decided the assessee's appeal at all without the prior payment of the tax demanded. On reference : HELD In order that the appeal of the assessee against the order of the ITO imposing a penalty on him could be heard at all by the AAC, it was necessary for the assessee to pay the tax demanded from him beforehand. Note: The case has been decided in favour of the revenue. CASE REVIEW Raja of Venkatagiri v. CIT [1955] 28 ITR 189 distinguished. CASE REFERRED TO Raja of Venkatagiri v. CIT [1955] 28 ITR 189 (AP). JUDGMENT Falshaw, CJ.-This is a reference made to this court by the Income-tax Appellate Tribunal under section 66(1) of the Income-tax Act at the instance of the assessee, Messrs. Leela Separator Manufacturing Company Private Ltd. The case arises out of the assessment of income-tax of the company for the assessment year 1957-58 in respect of which a notice was issued to the company by the Income-tax Officer on the 24th of November, 1956, for the payment of Rs. 14,528-2-0 as advance payment of tax under…

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