ASSAM FRONTIER VENEER AND SAW MILLS Vs. COMMISSIONER OF INCOME TAX
HIGH COURT OF GAUHATI
ASSAM FRONTIER VENEER And SAW MILLS
COMMISSIONER OF INCOME TAX
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D.M.SEN, J. -
(1.) THIS is a reference under S. 256(1) of the IT Act, 1961, at the instance of the assessee, on certain
questions of law arising out of the Tribunal's order passed in I. T. As. Nos. 3238(Gau) of 1969 -70
and 3387 (Gau) of 1969 -70. The questions of law that have been referred are :
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the ITO was justified in imposing the penalty under S. 271(1)(a) of the IT Act. 1961, ignoring the petition for extension of time filed by the assessee on April 24, 1964 ? (2) Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the order of the ITO was valid as the period of default and the qualification of the amount of penalty could be found from the order of the ITO ?"
(2.) WE have to state briefly the facts leading to this reference in order to appreciate the context in which these two questions of law have arisen and been referred to us.
A notice under S. 139(2) of the IT Act, 1961 (hereinafter called "the Act"), dt. May 25, 1963, had been served on the assessee -company on May 29, 1963, in respect of the asst. year 1963 -64.
The assessee did not, however, file any return, in spite of the said notice, whereupon the ITO took
action under S. 271(1)(a) of the Act. The notice under S. 274 of the Act had been served on the
assessee fixing April 27, 1964, for hearing. On April 25, 1964, the assessee submitted an
application for extension of the date for furnishing its return up to April 30, 1964, on grounds
stated in its letter dt. April 24, 1964. This application for extension of time was made in accordance
with Form 6, as prescribed under r. 13 of the IT Rules, 1962. The ITO in his assessment order dt.
April 7, 1964, after taking note of this application, observed that it was made long after the due
date for submission of return by the assessee and also held that the reasons for delay given by the
assessee were not convincing. The ITO, accordingly, imposed a penalty at the prescribed rate
under S. 271(10(a) of the Act. The assessee contended, first, before the AAC and then before the
Tribunal that the ITO should have passed a specific order on its application for extension of time
submitted in form No. 6 and since of the ITO had failed to do so, it must be held that the ITO did
grant extension of time as prayed for. The ITO, according to the assessee, could also not impost
the penalty under S. 271 ignoring the petition for extension of time. The assessee now urges in this
reference that the Tribunal was wrong in upholding the said order of penalty passed in the above
circumstances. the assessee further contends that the Tribunal was also wrong in upholding the
order of penalty, as the ITO had not quantified the amount but, instead, merely mentioned in his
order that the penalty be imposed at the prescribed rate under S. 271(11)(a) of the Act.
(3.) THE questions of law have been referred to us on the above premises.;
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