JUDGMENT V.G. Oak, C.J.
1. This is a reference under Section 66 of the Indian Income-tax Act, 1922 (hereafter referred to as " the Act "). Messrs. Motor General Sales (P.) Ltd. is the assessee. The proceedings under consideration relate to the assessment year 1957-58. The assessee was provisionally assessed for the year 1956-57 under Section 23B of the Act on August 30, 1956. The assessee-company was assessed under Section 23 of the Act for the first time on July 4, 1957. On September 10, 1959, the Income-tax Officer issued a notice to the assessee for default ^under Section 18A(9)(b) of the Act on the ground that the assessee had failed to furnish an estimate as required under Section 18A(3) of the Act. The assessee submitted a reply advancing five different grounds for not imposing penalty. None of the pleas was accepted by the Income-tax Officer. He held that there was a breach of Sub-section (3) of Section 18A of the Act. Consequently, the assessee was liable to a penalty under Clause (b) of Sub-section (9) of Section 18A of the Act. Penalty amounting to Rs. 51,094 was imposed upon the assessee.
2. The assessee appealed from the order imposing penalty, and succeeded before the Appellate Assistant Commissioner. He cancelled the penalty imposed upon the assessee. The Income-tax Officer, Lucknow, appealed against the decision of the Appellate Assistant Commissioner. The appeal was, however, dismissed by the Appellate Tribunal, Allahabad. At the request of the Commissioner of Income-tax, U.P., the Appellate Tribunal has referred the following question of law to this court:
" Whether the assessment made under Section 23B on the assessee for 1956-57 on August 30, 1956, had the effect of placing the assessee in the category of persons 'hitherto assessed' and, therefore, not liable to file an estimate under Section 18A(3) ? "
3. In the present case, the assessee was penalised on account of alleged breach of Sub-section (3) of Section 18A of the Act. Sub-section (3) of Section 18A ran thus:
" Any person who has not hitherto been assessed shall, before the 15th day of March in each financial year .... send to the Income-tax Officer an estimate of the tax payable by him ....."
4. It will be seen that the operation of Sub-section (3) of Section 18A was confined to persons who had not hitherto been assessed. The question, therefore, arises whether in the present case the assessee was a person who had not hitherto been assessed within the meaning of Section 18A(3) of the Act.
5 . This point came up for consideration before the Supreme Court in an appeal from this court. The decision is reported in Income-tax Officer, Kanpur v. Mani Ram, [1969] 72 I.T.R. 203 (S.C).
In that case the assessee had been provisionally assessed under Section 23B of the Income-tax Act, 1922, for the assessment year 1954-55. It filed returns for the years 1955-56 to 1958-59, but had not sent any estimate of advance tax under Section 18A or paid any advance tax. It was held by the Supreme Court that the word "assessed" in Section 18A(3) of the Act should be read in its ordinary sense as comprising every kind of assessment including a provisional assessment under Section 23B of the Act. Since the assessee had been provisionally assessed, it was not a person who had " not hitherto been assessed ", and was, therefore, not liable to submit an estimate under Section 18A(3) or pay the tax.
6. The present case is on all fours with the case of Mani Rom referred to above. In the instant case, admittedly, the assessee was assessed for the assessment year 1956-57 under Section 23B on August 30, 1956, before the 15th of March, 1957. Consequently, the assessee's case was not covered by Sub-section (3) of Section 18A of the Act. The assessee could not be said to have committed a breach of Sub-section (3) of Section 18A of the Act. The assessee was not liable to any penalty under Clause (b) of Sub-section (9) of Section 18A of the Act.
7. Our answer to the question referred to the court is that the assessment made under Section 23B on the assessee for 1956-57, on August 30, 1956, had the effect of placing the assessee in the category of persons "hitherto assessed", and, therefore, not liable to file an estimate-under Section 18A(3) of the Act. The question is answered in favour of the assessee. The Commissioner of Income-tax, U.P., shall pay the assessee Rs. 200 as costs of this reference.