Divan, J.
1. The same question has been referred by the Tribunal under section 66(1) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act) in each of these three references and we will dispose of them by this common judgment. The interesting question which arises in these three references is as to the effect of the repeal of the Act by the Income-tax Act, 1961 (hereinafter referred to as the Act of 1961).
2. In Income-tax Reference No. 25 of 1965, the assessee is an individual and the relevant assessment year is 1962-63. The Income-tax Officer called upon the assessee by a demand notice under section 18A (1), dated June 10, 1961, to pay advance tax in four equal instalments falling due on June 15, 1961, September 15, 1961, December 15, 1961, and March 15, 1962. For the purposes of this judgment, the amount which the assessee was called upon to pay is not relevant. The assessee failed to pay the instalment which fell due on December 15, 1961. The Income-tax Officer required the assessee to pay immediately the tax instalment which was being demanded and which had remained unpaid and in default of the payment, the assessee was asked to treat the letter as a show-cause penalty notice for non-payment of tax on the due date. The assessee neither paid the tax nor appeared before the Income-tax Officer on the due date to explain to him the circumstances. Thereafter, on September 15, 1962, the Income-tax Officer imposed a penalty on the assessee in the sum Rs. 3,575 under section 46(1) read with section 18A of the Act. This penalty order was challenged before the Appellate Assistant Commissioner and the appeal was dismissed. Thereafter, there was a further appeal before the Tribunal and the Tribunal also dismissed the appeal, and, thereafter, the following question has been referred to us by the Tribunal :
'Whether, on the facts and in the circumstances of the case, the penalty imposed upon the assessee for non-payment of tax is valid and legal ?'
3. In Income-tax Reference No. 26 of 1965, the assessment year was also 1962-63. The notice under section 18A (1) was served on the assessee on June 14, 1961, to pay advance tax in four equal instalments falling due on the four identical dates referred to in the case of the assessee in Reference No. 25 of 1965. The assessee in this reference paid the first instalment but failed to pay the next two instalments which fell due on September 15, 1961, and December 15, 1961. In the case of the assessee in this reference, the Income-tax Officer after calling upon the assessee to pay up the two instalments or in default of payment to treat the letter as show-cause penalty notice, imposed a penalty in the sum of Rs. 5,100 under section 46(1) of the Act read with section 18A. In this case also there was an appeal to the Appellate Assistant Commissioner, which failed; and the appeal to the Tribunal also failed and thereafter the same question, which has been set out above, has been referred at the instance of the assessee.
4. In Income-tax Reference No. 31 of 1965, the assessment year was 1962-63. The assessee had been called upon by the demand notice under section 18A (1) served on the assessee on May 31, 1961, to pay advance tax in four equal instalment payable on June 15, 1961, September 15, 1961, December 15, 1961 and March 15, 1962. The first three instalments were paid by the assessee but he failed to pay the last instalment that fell due on March 15, 1962. In the case of this assessee also, the Income-tax Officer wrote a letter to the asking the assessee to pay immediately the tax demanded and which had remained unpaid and in default to treat the said letter as notice for penalty. The assessee neither paid the tax nor appeared before the Income-tax Officer to explain the circumstances and ultimately the Income-tax Officer imposed the penalty in the sum of Rs. 1,160 under section 46(1) of the Act read with section 18A of the Act. Against the order imposing the penalty the assessee appealed to the Appellate Assistant Commissioner and the appeal failed. There was a further appeal to the Tribunal and the Tribunal also dismissed the appeal and thereafter at the instance of the assessee, the same question, which has been set out above, has been referred under section 66(1) of the Act.
5. Before the lower authorities, the revenue relied upon the provision of section 6 of the General Clauses Act. But our attention has been drawn to the decision of the Supreme Court Act. But our attention has been drawn to the decision of the Supreme Court in Kalawati Devi Harlalka v. Commissioner of Income-tax Appeal No. 1421 of 1966, decided on May 1, 1967). In that case, after examining the provisions of the General Clauses Act and also the entire scheme of section 297, which is the repealing section in the Act of 1961, the Supreme Court came to the conclusion that section 297 of the Act of 1961 is meant to provide, as far as possible, for all contingencies, which may arise out of the repeal of the 1922 Act, and the Supreme Court took the view that section 6 of the General Clauses Act would not apply because section 297(2) evidences an intention to the contrary. Section 6 of the General Clauses Act in the commencement portion indicates that the provisions of that section are to apply unless a different intention appears and after examining the provisions of section 297(2), the Supreme Court came to the conclusion that since there is an intention to the contrary appearing in section 297(22), section 6 of the General Clauses Act will not apply. The Supreme Court then observed as follows :
'It seems to us, however, that by providing for so many matters mentioned above, some in accord with what would have been the result under section 6 of the General Clauses Act and some contrary to what would have been the result under section 6, parliament has clearly evidenced an intention to the contrary.'
6. Under these circumstances, it is clear that the provisions of section 6 of the General Clauses Act cannot be invoked for the purpose of upholding the order of penalty which has been passed against the assessee in each of these three matters.
7. The question then arises whether, under section 297(2) of the Act of 1961, there is any provision which would enable the Income-tax Officer to pass the order of penalty under section 46(1) of the Act of 1922, even after the Act of 1922 had been repealed by section 297(1) of the Act of 1961. On behalf of the revenue, reliance was placed on section 297(2) (f) and (j) of the Act of 1961. Section 297(2)(f) runs as follows :
'(2) Notwithstanding the repeal of the Indian Income-tax Act, 1922 (hereinafter referred to as the repealed Act), -.... (f) any proceeding for the imposition of a penalty in respect of any assessment completed before the 1st day of April, 1962, may be initiated and any such penalty may be imposed as if this Act had not been passed.'
8. If, therefore, a notice of demand under section 18A can be said to be an assessment and if the issuing of such notice can be said to be completion of such an assessment, then the proceedings for the imposition of the penalty for non-payment of advance tax under section 18A can be initiated and the penalty may be imposed as if the Act of 1961, had not been passed, i.e., as if the Act of 1922 still remained in force.
9. Section 297(2)(j) of the Act of 1961 provides as follows :
'(2) Notwithstanding the repeal of the Indian Income-tax Act, 1922, (hereinafter referred to as the repealed Act), -.... (j) any sum payable by way of income-tax, super-tax, interest, penalty or otherwise under the repealed Act may be recovered under this Act, but without prejudice to any action already taken for the recovery of such sum under the repealed Act.'
10. If the contention urged on behalf of the revenue is right, proceedings for the imposition of penalty for non-payment of the instalment in pursuance of the notice under section 18A (1) can be initiated and the penalty may be imposed as if the Act of 1922 were still in force, and having provided for such imposition of penalty under the provisions of the Act of 1922, clause (j) of section 297(2) of the Act of 1961 provides for the recovery of the sum, which is payable by way of penalty under the provisions of the Act of 1961.
11. As regards the meaning of the word 'assessment', in Commissioner of Income-tax v. Khemchand Ramdas, the Privy Council has observed as follows :
'One of the peculiarities of most Income-tax Acts is that the word 'assessment' is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the taxpayer. The Indian Income - tax Act is no exception in this respect......'
12. These observations were made with reference to the Act of 1922. This passage from the judgment of the Privy Council was cited with approval by the Supreme Court in C. A. Abraham v. Income-tax Officer, Kottayam, and after citing the aforesaid passage, Shah J., delivering the judgment of the Supreme Court, observed as follows :
'A review of the provisions of Chapter IV of the Act (Indian Income-tax Act, 1922) sufficiently discloses that the word 'assessment' has been used in its widest connotation in that chapter. The title of the chapter is 'Deductions and Assessment'. The section which deals with assessment merely as computation of income is section 23; but several sections deal not with computation of income, but determination of liability, machinery for imposing liability and the procedure in that behalf. Section 18A deals with advance payment of tax and imposition of penalties for failure to carry out the provisions therein..... The expression 'assessment' used in these sections is not used merely in the sense of computation of income...... '.
13. It is, therefore, clear that so far as the word 'assessment' is concerned, in the context of section 18A, 'assessment' has to be understood as the whole procedure laid down under the Act for imposing liability upon the taxpayer.
14. Under section 18A of the Act, which occurs in Chapter IV, it has been provided as follows :
'18A. (1) (a) In the case of income in respect of which provision is not made under section 18 for deduction of income-tax at the time of payment, the Income-tax Officer may, on or after the 1st day of April in any financial year, by order in writing, require an assessee to pay quarterly to the credit of the Central Government on the 15th day of June, 15th day of September, 15th day of December and 15th day of March in that year respectively, an amount equal to one-quarter of the income-tax and super-tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed, if that total income exceeded the maximum amount not chargeable to tax in his case by two thousand five hundred rupees. Such income-tax and super-tax shall be calculated at the rates in force for the financial year in which he is required to pay the tax, and shall bear to the total amount of income-tax and super-tax so calculated on the said total income the same proportion as the amount of such inclusions bears to his total income or, in cases where under the provisions of sub-section (1) of section 17 both income-tax and super-tax or super-tax are chargeable with reference to the total world income, shall bear to the total amount of income - tax and super-tax which would have been payable on his total world income of the said previous year had it been his total income the same proportion as the amount of such inclusions bears to his total world income : Provided that, where the previous year of the assessee in respect of any source of income ends after the 31st day of December and before the 30th day of April, the order in writing issued by the Income-tax Officer requiring the payment of income-tax and super-tax on that source of income shall substitute for the four quarterly payments hereinbefore specified, three payments of equal amount to be made on the 15th day of September, the 15th day of December and the 15th day of March, respectively.'
15. Thus under the scheme of section 18A (1), the Income-tax Officer has to issue an order in writing requiring the assessee to pay in advance income-tax and super-tax on the four dates mentioned in the section. Further, the income-tax and super-tax so required to be paid are to be calculated on the basis of the income included in the total income of the latest previous year in respect of which the assessee has been assessed.
16. Sub-section (2) of section 18A provides as follows :
'(2) If any assessee who is required to pay tax by an order under sub-section (1) estimates at any time before the last instalment is due that the part of his income to which that sub-section applies for the period which would be the previous year for an assessment for the year next following is less than the income on which he is required to pay tax and accordingly wishes to pay an amount less than the amount which he is so required to pay, he may send to the Income-tax Officer an estimate of the tax payable by him calculated in the manner laid down in sub-section (1) on that part of his income for such period, and shall pay such amount as accords with his estimate in equal instalments on such of the dates specified in sub-section (1) (a) as have not expired or in one sum if only the last of such dates has not expired : Provided that the assessee may send a revised estimate of the tax payable by him before any one of the dates specified in sub-section (1) (a) and adjust any excess or deficiency in respect of any instalment already paid in a subsequent instalment or in subsequent instalments.'
17. Thus, so far as sub-section (1) of section 18A is concerned, the legislature has laid down the standard on the basis of which the Income-tax Officer can issue the order in writing calling upon the assessee to pay being the income of the assessee of the latest previous year in respect of which the assessee has been assessed, i.e., regular assessment has been completed. If the assessee contends that this estimate of the income of the assessee for that particular year arrived at on the basis of the statutory standard laid down in section 18A (1) is not correct, under section 18A (2) it is open to the assessee to substitute his own estimate of his income and pay the tax in advance under the scheme of section 18A (1) is capable of being revised by the assessee himself on his own data under section 18A (2). Under section 18A (11), any sum other than a penalty or interest paid by or recovered from an assessee in pursuance of the provisions of that section shall be treated as a payment of tax in respect of the income of the period which would be the previous year for an assessment for the financial year next following the year in which it was payable, and credit therefor shall be given to the assessee in the regular assessment. Therefore, under sub-section (11), though the tax is paid in advance in pursuance of the notice or order under section 18A (1) (a), this sum is to be treated as a payment of tax in respect of the income, which would be subject to tax in the next assessment year following the particular financial year in which the payments are made and it is to be deemed to be in respect of the income of the assessee for the relevant previous year with reference to that assessment year. Since it is open to an assessee to have a previous year different from the financial year, this provision under sub-section (11) was required to be made in order to adjust the advance payment of tax with reference to the tax liability for the following assessment year, i.e., assessment year following the financial year during which the payments are made.
18. Under section 23B of the Act of 1922, power was given to the Income-tax Officer at any time after the receipt of the return made under section 22, to proceed to make in a summary manner, a provisional assessment of the tax payable by the assessee, on the basis of his return; and the income-tax paid under section 18A in respect of any income provisionally assessed under sub-section (1) of section 23B is to be deemed to have been paid towards the provisional assessment. Sub-section (7) of section 23B of the Act of 1922 provides as follows :
'(7) After a regular assessment has been made under section 23, any amount paid or deemed to have been paid towards a provisional assessment made under sub-section (1), shall be deemed to have been paid towards the regular assessment; and where the amount paid or deemed to have been paid towards the provisional assessment, exceeds the amount payable under the regular assessment, the excess shall be refunded to the assessee.'
19. Under section 23, the legislature has provided for what may be referred to as the regular assessment for any particular assessment year. The income which is brought to charge in the assessment year is the income of the previous year as defined in the Act. Therefore, apart from what may happen after an order of assessment was passed under section 23 in a regular assessment, two earlier stages were contemplated by the Act of 1922, viz., the advance payment of tax, which may be income-tax or super-tax or both. Secondly, the provisional assessment under section 23B; and then would come the stage of regular assessment for the relevant assessment year under section 23. After the assessment under section 23 is completed, there may be an appeal against the order of assessment, or there may be a revision, reassessment or rectification. It may be pointed out that Chapter IV of the Act of 1922 dealing with deductions and assessments contains sections 18 to 39 (both inclusive); and according to the observations of Shah J. in C. A. Abraham's case the word 'assessment' in Chapter IV has been used in its widest connotation, i.e., in the sense of the whole procedure laid down in the Act for imposing liability upon the taxpayer.
20. It was contended before us that, under section 297(2)(f) of the Act of 1961, the legislature has mentioned that the proceedings for the imposition of penalty can be initiated and the penalty may be imposed under the provisions of the Act of 1922, even after the Act of 1961 came into force provided the imposition of penalty is in respect of any assessment completed before the first day of April, 1962. It was contended before us on behalf of the assessee that the completion of assessment takes place only when a regular assessment is completed under the provisions of section 23 of the Act of 1922. An order under section 18A, according to this contention, was merely an order for payment of an ad hoc amount of tax and an order of provisional assessment under section 23B cannot be said to be an assessment completed because the completion of the assessment takes place only when the order for assessment is passed on a regular assessment under section 23B. If this argument were to be accepted, we will have to put a very narrow meaning on the word 'assessment', viz., computation of income. As has been pointed out in C. A. Abraham's case, section 23 deals with 'assessment' merely as computation of income but if the word 'assessment' occurring in the rest of the sections of Chapter IV of the Act of 1922 is to be interpreted in the sense of the whole procedure laid down in the Act for imposing liability upon the taxpayer, it is clear that there may be various steps in this procedure for imposing the tax liability upon the taxpayer; and each of such steps can be completed though the computation of income under section 23 is not completed or is yet to be completed. The legislature has not used the words 'completed finally' in section 297(2)(f) of the Act of 1961. Therefore, as part of the whole procedure for imposing liability upon the taxpayer, even in the case of regular assessments, different steps are envisaged. As part of the procedure for imposing tax liability upon the taxpayer, section 18A lays down that, on the basis of the Income of the latest previous year for which assessment has been completed, the Income-tax Officer can issue an order directing the assessee to pay the amount of income-tax and super-tax in four equal instalments. Under section 23B, on the basis of the return filed by the assessee under section 23 in the course of the regular assessment, the taxable income of the taxpayer is to be computed and then the amount of the income-tax and super-tax has to be determined. The demand of advance payment of tax under section 18A and the passing of order of provisional assessment under section 23B are different stages in the comprehensive procedure for imposing the tax liability upon the taxpayer in respect of the taxable income brought to charge for a particular assessment year. The stage of the procedure laid down in section 18A is completed as soon as the demand notice is issued. The stage of provisional assessment is completed as soon as the order of provisional assessment under section 23B is issued and the regular assessment is completed when the assessment order is passed by the Income-tax Officer under section 23. Therefore, when section 297(2)(f) speaks of 'any assessment completed before the 1st day of April 1962', what is contemplated is the completion of any stage or anything in the process of assessment and if such step or stage is completed before 1st April, 1962, then the proceedings for the imposition of penalty in respect of that stage may be initiated and such penalty may be imposed as if the Act of 1961 had not been passed. This being the case, in our opinion, the words : 'any assessment completed before the 1st day of April, 1962' in the context in which they occur and occurring as they do not in a repealing section have to be interpreted as meaning 'any stage in the procedure of imposing the tax liability upon the taxpayer. ' That being the case, it is clear that the notice of demand having been issued under section 18A prior to 1st April, 1962, that particular stage in the assessment was completed in the case of each of the three assessees and the proceedings for the imposition of penalty in respect of that completed stage could be taken under section 46(1) of the Act of 1922 as if the Act of 1961 had not been passed.
21. Under these circumstances, the order passed by the Income-tax Officer in each of these three cases under section 46(1) of the Act was a valid and legal order. We, therefore, answer the question in each of these three references in the affirmative. The assessee will pay the cost of the Commissioner in each of these three references.
22. Question answered in the affirmative.