V.G. Oak, C.J. - (1.) THIS petition under Article 226 of the Constitution is directed against penalty proceedings under the Indian Income-tax Act, 1922, hereinafter referred to as "the Act"). There was a firm, Rameshwar Lal Bisheshwar Lal, consisting of two partners, Bisheshwar Lal and Rameshwar Lal, who were brothers. The firm was assessed to income-tax for four assessment years 1944-45, 1945-46, 1946-47 and 1948-49. The assessee-firm successively appealed to the Appellate Assistant Commissioner and the Appellate Tribunal. Both these appellate authorities gave some relief to the assessee for the four assessment years. Between October 5, 1949, and August 10, 1961, the Income-tax Officer, Goiida, issued a series of notices to the firm calling upon it to show cause why penalty should not be imposed on the assessee-firm under Section 28(1)(c) of the Act on the ground that the firm concealed its income relevant to the four assessment years. The firm sent several replies to the effect that there was no concealment of income on the part of the firm. Ultimately, on April 19, 1963, Bisheswar Lal filed in this court the present writ petition challenging the penalty proceedings. The petitioner has prayed that the penalty proceedings be quashed.
(2.) IT has been stated in paragraph I of the petition that the firm, Rameshwar Lal Bisheshwar Lal, was dissolved as far back as the year 1948. This position was accepted in the counter-affidavit filed by the Income-tax Officer, Gonda. The main contention of Mr. Brijlal Gupta, appearing for the petitioner, is that there has been inordinate delay in initiating penalty proceedings. It is pointed out that the notices issued to the assessee-firm under Section 28 of the Act covered a period of 12 years from 1949 to 1961. On the other hand, Mr. Gopal Behari, appearing for the respondent, urged that there is no period of limitation for a proceeding under Section 28 of the Act. In Henry William Hatton v. Hugh Harris, 1892 A.C. 547, the House of Lords agreed to correct an accidental omission in a decree after an interval of 39 years. In the present case we are not dealing with any accidental omission. The case of the department is that the assessee-firm deliberately concealed its income.
(3.) IN Ram Kishan Baldeo Prasad v. Commissioner of INcome-tax, 1967 65 ITR 491, the question referred to this court was : "Whether, for the assessment year 1945-46, the assessment of which was made in March, 1950, could a penalty be imposed in August, 1957 ?" It was held by this court that, although no period of limitation has been prescribed for imposing a penalty, and a penalty could be imposed as late as August, 1957, propriety required the changed circumstances to be taken into consideration and the responsibility for the inordinate delay should be considered and fastened before levying penalty or upholding it. In. that case it was found that the assessee filed its return for the assessment year 1945-46 on July 20, 1949. There was no valid explanation for the delay in filing the return. Thus, in that case, there was clear evidence on the record that the assessee was guilty of laches in filing a return. In the present case there is no clear indication on the record about the alleged concealment of income. We note that the assessee succeeded in persuading the Appellate Assistant Commissioner and the Appellate Tribunal to reduce the quantum of assessment for the four assessment years in question. It. thus appears that it was all a question of making an estimate about the income of the assessee for the four assessment years.;