RAM KISHAN BALDEO PRASAD Vs. COMMISSIONER OF INCOME TAX U P
HIGH COURT OF ALLAHABAD
RAM KISHAN BALDEO PRASAD
COMMISSIONER OF INCOME-TAX, U.P.
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(1.)THIS is a case stated under section 66(2) of the Income-tax Act, 1922 (hereinafter referred to as the Act). The question which has been referred is:
"Whether for the assessment year 1945-46, the assessment of which was made in March, 1950, could a penalty be imposed in August, 1957?"
(2.)THE material facts are these: The assessee is a firm. The relevant assessment year is 1945-46, for which a notice under section 22(2) of the Act was served in June, 1945. Before the expiry of the period given therein for filing the return, an application was moved praying for 12 weeks' further time. This application, however, was rejected. Thereafter, notices under section 22(4) were issued to the assessee. The notices were not complied with for one reason or the other. On the 24th of June, 1949, a notice under section 28(3) was issued to show cause why a penalty be not levied in respect of the default in filing the return. Thereafter, a return was filed on the 20th of July, 1949. The assessee in reply to the said penalty notice pleaded that he could not file the return earlier since his books of accounts were with the Enforcement Branch of the Police. The Income-tax Officer, however, ascertained that he books had been returned byte police in February, 1946. As there was no valid explanation for the delay in filing the return, a penalty of Rs. 2,500 was imposed against the maximum penalty, which could have been levied of Rs. 25,143. This order under section 28(1) (a) was passed on the 20th of August, 1957. There is not a word mentioned as to why it took the Income tax Officer more than 8 years after the penalty notice was issued and 11 years since the end of the relevant assessment year to impose the penalty.
Before the Appellate Assistant Commissioner the question of inordinate delay in imposing the penalty on the 20th of August, 1957, when the notice under section 28(3) was issued on the 24th of June, 1949, was disposed of by merely saying:
"There has been no doubt an inordinate delay on the part of the department in finalising the penalty proceedings but against the maximum penalty of Rs. 25,143 which could be imposed in its case, the penalty imposed is Rs. 2,500 only, which is neither excessive nor unreasonable."
(3.)IN other words, it was considered that, so long as the penalty imposed is less than the maximum leviable, that per se would be sufficient explanation for the inordinate delay in completing the penalty proceedings. Though mn the statement of the case it is stated:
"Among other grounds, the assessee urged that there was inordinate delay in levying the penalty. The Tribunal dismissed the appeal by a short order dated October 23, 1959. The ground relating to the delay in imposing penalties not discussed in the Tribunal's order."
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