Bibhuti Bhusan Roy Vs. Income-tax Officer, a Ward and ors. - Court Judgment

Sabyasachi Mukharji, J.

1. The petitioner in this case challenges the challan which has been issued to him which appears at pages 26 and 27 of the petition for payment of a sum of Rs. 9,735. It appears that the said challan was issued to the petitioner pursuant to the representation made after a notice under Section 221(1) of the Income-tax Act, 1961, dated 23rd November, 1974, was served upon him. The petitioner was served with a notice under Section 56 of the Income-tax Act, 1961, for payment of advance tax under Section 210 of the Income-tax Act, 1961. The said notice, though dated 25th July, 1970, was not signed by the Income-tax Officer and the order under Section 210 of the Income-tax Act similarly was not signed by the Income-tax Officer. Section 210 enjoins that where a person has been previously assessed by way of regular assessment the Income-tax Officer might on or after 1st April in the financial year by an order in writing require him to pay to the credit of the Central Government advance tax determined in accordance with the provisions of sections 207, 208 and 209. If such an order is issued under Section 210 then an assessee is under obligation under Section 213, Sub-section (3A), if his income is more, to file an estimate. If he does not file an estimate and his income is more and does not pay tax according to the estimate then he is liable under Section 217(1A) to pay interest. But the liability to pay interest under Sub-section (1A) of Section 217 for failure to pay tax on the estimate of enhanced income, arises on the making of a valid order under Section 210 of the Act and the service of the said order upon the assessee.

2. In the instant case, the order under Section 210 was not signed. The notice pursuant thereto, was also not signed. The original was produced before me and it appears that the said order was not signed. In view of the principle enunciated by a Bench, decision of this court in the case of B. K. Gooyee, v. Income-tax Officer : [1966]62ITR109(Cal) , it must, be held that there was no valid order under Section 210 and as such there was no obligation to file an estimate by the assessee and as such there can be no liability to pay interest under Sub-section (1A) of Section 217 of the Act. Furthermore, in. the challan that has been handed over which is the subject-matter of challenge, interest under Section 220(2) has been charged. It appears that the original notice of demand was served on the assessee on the 3rd December, 1973. Before the expiry of 35 days the assessee pointed out that credit had not been given to the sum of Rs. 4,044 paid as advance tax by the assessee as also the sum of Rs. 752.21 which was deducted as tax at source. If these two amounts were given credit, the tax liability of the assessee would be reduced. In the challan which is the subject-matter of challenge that amount has been reduced to Rs. 7,911 but still interest has been claimed under Sub-section (2) of Section 220 for the sum of Rs. 885. This interest the assessee is not liable to pay inasmuch as there was no valid notice of demand under Section 156 issued to the assessee.

3. In the aforesaid view of the matter, the appropriate order should be that the petitioner should pay Rs. 7,911 as also the petitioner is liable to pay interest on the said sum from 31st January, 1975, up to date. Out of the amount that has been directed to be deposited pursuant to an order of this court with Messrs. P. D. Himatsingka and Co., the said Messrs. P. D. Himatsingka and Co. is directed to pay Rs. 7,911 with interest at the rate of 9% per annum on the said sum to the Income-tax Officer by 7th January, 1976, and the balance, if any, P. D. Himatsingka and Co. will be at liberty to refund to the petitioner. The rule is disposed of on those terms.

4. There will be no order as to costs.