After the completion of assessment, an assessing officer can demand additional income-tax, interest for delayed payment of tax and also separately initiate penalty proceedings under the Income Tax Act, 1961. The Supreme Court has held that where interest is charged, no penalty can be imposed/levied as it would violate Article 20(1) and Article 265 of the Constitution (since no person can be convicted or punished for the same offence more than once). In many cases, aggrieved assessees pay full additional income-tax and interest demanded and still file appeals on the merits of the case. Even then, penalty proceedings are initiated separately by assessing officers and penalty levied on dismissal of the appeals of the assessee. Some chartered accountants have advised that such violation of Supreme Court rulings by tax recovery officers is not in order. Would you agree that the Income Tax Act needs to be amended to facilitate compliance with Supreme Court orders by tax recovery officers?
The querist has not mentioned the name and citation of the case where according to him the view as mentioned in the letter has been expressed. However, the legal position as per my understanding is as follows: Article 20 of the Constitution does not apply to provisions imposing penalties and interest under the tax laws and this view gets support from the following decisions: Raghunandan Pd. Mohanlal vs ITAT (1970) 75 ITR 741; Shiva Dutta Rai Fateh Chand vs UOI (1984) 148 ITR 664 (SC) Cement Distributors P Ltd vs IAC and Another (1973) 87 ITR 103. In Express Newspaper (P) Ltd vs ITO and another (1973) 88 ITR 255, the assessees
