1. S. N. DWIVEDI, J.-The facts giving rise to this appeal are these : There was a business firm known as Niranjan Lal Ghanshyam Das. The firm was doing business at Daranagar in the district of Allahabad. It bad five partners. The appellant was one of them. It was dissolved on April 11, 1948.
2. The firm was assessed to income-tax for the assessment year 1948-49 on February 2, 1950. On January 17, 1951, a penalty of Rs. 6,000 was imposed on the firm under .Section 28 of the Income-tax Act, 1922 (herein-below called the Act). The penalty was not paid, and on November 12, 1961, the Income-tax Officer imposed a penalty of Rs. 600 for default in payment of the penalty imposed under section 28. The appellant was then asked to pay the amount of the second penalty. He protested and filed a writ petition in this Court. The petition was dismissed on merits by a learned Single Judge ; hence this appeal.
3. Counsel for the appellant has challenged the validity of the imposition of a penalty on a penalty.
4. Counsel for the respondent seeks to justify the imposition with the aid of section 46(1) and section 47 of the Act. Section 46(1) provides: "46. (1) When an assessee is, in default in making a payment of income-tax, the Income-tax Officer may in his discretion direct that, in addition to the amount of the arrears, a sum not -exceeding that amount shall be recovered from the assessee by way of penalty." '
5. Section 47 pertinently provides: "any sum imposed by way of penalty under the provisions of subsection (2) of section 25, section 28, subsection (6) of section 44-E, subsection (5) of section 44-.F or subsection (1) of section 46 . . .
6. Shall be recoverable in the manner provided in this Chapter for the recovery of arrear of tax."
7. Two questions have been debated before us : (1) Can the word "income-tax" in subsection (I) of section 46 be read as including "penalty" also? (2) Is penalty a mode of recovering the arrears? We shall discuss the first question first.
8. We would like to point out certain difficulties in the way of construing the word "income-tax" as including "penalty" also. Firstly, the extensive construction would make a part of section 47 superfluous. A construction which makes a legislative provision redundants shall not be readily accepted. We have not been shown any compelling reason to think that section 47 is partly redundant. It is not a sufficient explanation to say that section 47 is the product of abundant caution. Secondly, the words "income-tax" and "penalty" have been used separately in the other provisions of the Act. Section 29 speaks of "any tax, penalty or interest". Again, subsection (5-A) of section 46 itself speaks of "arrears of income-tax and penalty". Lastly, we venture to think that subsection (1) of section 46 being a provision of punitive nature, the word "income-tax" should receive its ordinary and natural meaning. No one should be put in peril on an ambiguity.
9. The learned Judge could not give due weight to these considerations for he felt that the first question was foreclosed against the appellant by 'the decision of the Supreme Court in C. A.
10. Abraham v. Income-tax Officer, Kottayam ((1961) 41 I T R 425). The learned Judge said : "So far as the first ground is concerned, that seems to be no longer available to the petitioner in view of the decision of the Supreme Court ruling referred to above."
11. The learned Judge relied on the following observations in the aforesaid case : "By section 28, the liability to pay `additional tax' which is designated `penalty' is imposed in view of dishonest and contumacious conduct of the assessee. It is true that this liability arises only if the Income-tax Officer is satisfied about the existence of the conditions which has given him jurisdiction and the quantum thereof depends upon the circumstances of the case: The penalty is not uniform, and its imposition depends upon the exercise of discretion by the taxing authorities ; but it is imposed as a part of the machinery for assessment of tax liability."
12. With respect to the learned Judge, it appears to us that this passage should be read in its own context. In that case, the word "assessment" occurring in section 44 of the Act, fell for construc-- petition. The argument was that the Income-tax Officer could not impose a penalty under section 28(1)(c) of the Act for the assessee's firm had already ceased to exist. It was held that the word "assessm ent" was sufficiently wide to comprehend the imposition of a penalty. The case does not deal with the meaning of the word "income-tax" occurring in section 46(1). Accordingly, we think that the passage which we have already reproduced earlier should not be supposed to have foreclosed the question before us. In this connection it is instructive to notice another observation of their Lordships of the Supreme Court in the same case. Mr. Justice Shah observed thus : "Counsel for the appellant, relying upon Makankali Subba Rao v. Commissioner of Income-tax (1957) 31 I T R 867 in which it was held that 'an order imposing penalty under section 28(1)(c) of the Indian Income-tax Act upon a Hindu joint family after it had disrupted, and the disruption was accepted under section 25-A(1) is invalid, because, there is lacuna in the Act, submitted that a similar lacuna exists in the Act in relation to dissolved firms. But whether on the dissolu--petition of a Hindu joint family the liability for penalty under section 28 which may be incurred during the subsistence of the family cannot be imposed does not fall for decision in this case; it may be sufficient to observe that the provisions of section 25-A and section 44 are not in pari materia. In the absence of such phraseology in section 25-A as is used in section 44, no real analogy between the content of that section and section 44 may be assumed."
13. This observation lends support to our view that the word "income-tax" in section 46(1) should be construed in its own special setting.
14. Passing over to the second question, section 47 provides that any sum imposed as penalty under section 46(1) may be recovered "in the manner provided... For the recovery of arrears of tax".
15. Counsel for the respondent contended that subsection (1) of section 46 provides for the recovery of arrears of tax and that accordingly a penalty may be imposed upon a penalty. It is said that the potential sanction of penalty would induce an assessee to pay the penalty already imposed on him. The word "penalty" connotes the idea of punishment rather than the recovery of arrears of tax.
16. The imposition of a penalty upon a penalty would not directly lead to the recovery of the arrears of penalty already imposed upon an assessee, if he has no liquid assets or cannot manage to collect the necessary amount for paying off the penalty. Reference is made to the marginal note of section 46. The marginal note is, "mode and time of the recovery". It may be permissible to refer to the marginal note of a section if the language of the section is equivocal. But, we are unable to find any equivocation in subsection (1) of section 46. The marginal note aptly fits in with the provisions of subsection (2) of sub-- section (10) of section 46 and we think it should be restricted to those provisions only.
17. The learned Judge took the view that the second question should also be decided in favour of the respondent in view of another decision of the Supreme Court in Collector of Malabar v. Erimmal Ebrahim Hajee ((1957) 32 I T R 124 (SC)). The learned Judge said: "So far as ground No. 3 is concerned, it appears to me that that ground also is no longer available in view of, another decision of the Supreme Court . . ." The learned Judge relied upon the following passage in the judgment of the said case: "When dues in the shape of money are to be realised by the process of law and not by voluntary payment, the element of coercion in varying degrees must necessarily be found at all stages in the mode of recovery of tile money due. The coercive element, perhaps in its severest form, is the act of arrest in order to make the defaulter pay his dues."
18. The question with which their Lordships of the Supreme Court were concerned in that case was whether arrest for recovery of arrears of income-tax was a mode of recovery of the arrears of tax or was a punishment for failure to pay tax. It was held that the arrest was a mode of recovery of the arrears of tax and not a punishment for default in payment. Here again, we think that the said passage should be read in the context of the fact that the arrears of tax were being recovered by the arrest of the defaulters. Arrest and the imposition of tax or penalty appear to us to be two different matters ; arrest follows the imposition and is, therefore, a mode of recovery of tax or penalty. It is difficult to say that the imposition of penalty is a mode of recovery. Moreover, when the tax falls due, it becomes a civil debt and the recovery of the debt by the arrest of the defaulter has ancient sanction : Murray v. Hoboken Land Company ((1885) 18 How. 272) "By the common law, the body, lands and goods of the king's debtor were liable to be levied to obtain payment". Counsel for the respondent has failed to refer us to any authority on the point that the imposition of a penalty upon a penalty has at any time been regarded as a mode of recovery of the public debt. In our judgment the imposition of a penalty is punitive in nature and does not appertain to the mode of recovery.
19. Counsel for the appellant has also argued that section 44 does not apply to the case of a dissolved firm. No such question was presented in the petition nor was it raised before the Single Judge.
20. Accordingly, we would not allow it to be raised for the first time in appeal.
21. Counsel for the respondent has submitted that as the appellant had the alternative remedy of an appeal against the imposition of a penalty upon penalty, we should decline to interfere at his instance. This plea was not raised before the Single Judge at the hearing of the petition. The learned Judge decided the petition on merits. Again, we are taking the view that the imposition of the impugned penalty is invalid. In these circum--stances we think that it would not be proper to decline to interfere.
22. We allow the appeal with costs and quash the order of the Income-tax Officer, C-Ward, Allahabad, imposing she penalty of Rs. 600. We also issue a direction to the Collector, Kanpur, that he should