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Issues Involved:
1. Whether the Income-tax Officer has the right to levy penalties under both sections 28(1)(a) and 28(1)(b) of the Income-tax Act when the assessee has committed defaults by not filing a return and not complying with a notice under section 22(4) of the Act. 2. Whether an order passed by the Income-tax Officer under sections 28(1)(a) and 28(1)(b) is opposed to law if the quantum of penalty for each default is not specified in the order. Issue-Wise Detailed Analysis: 1. Levy of Penalties under Sections 28(1)(a) and 28(1)(b): The primary issue was whether the Income-tax Officer could impose penalties under both clauses (a) and (b) of section 28(1) of the Income-tax Act when the assessee failed to file a return and also did not comply with a notice under section 22(4). The court noted that the Income-tax Officer imposed penalties under both clauses for the assessment years 1951-52 to 1954-55. The penalties were aggregated without specifying the amounts for each clause. The court analyzed section 28(1) and concluded that the language of the section implies that a penalty under section 28(1)(b) could only be imposed if the assessee had furnished a return. Since the assessee did not furnish any return, the quantification of the penalty under section 28(1)(b) was deemed impossible. The court rejected the argument that not furnishing a return could be equated to furnishing a return with nil income, stating that such an interpretation would be artificial and far-fetched. The court further reasoned that interpreting the statute to allow penalties under section 28(1)(b) without a return would lead to absurd results, such as making it impossible to impose penalties under section 28(1)(a) for failure to furnish a return. The court concluded that the Income-tax Officer had no power to impose penalties under section 28(1)(b) when no return was filed, but could impose penalties under section 28(1)(a). 2. Specification of Quantum of Penalty: The second issue was whether the order imposing penalties was opposed to law due to the lack of specification of the quantum for each default under sections 28(1)(a) and 28(1)(b). The court noted that the Income-tax Officer did not separate the penalties for each clause, making it difficult to identify the penalties imposed under each section. Given the court's conclusion on the first issue, it found that the penalties under section 28(1)(b) were imposed without authority. Consequently, the court deemed it unnecessary to address the second issue, as it had become purely academic. The court refrained from expressing an opinion on whether it is mandatory to separately quantify penalties under each clause in all cases. Conclusion: The court resettled the first question to reflect the real issue, concluding that the Income-tax authorities cannot levy penalties under both clauses (a) and (b) of section 28(1) when the assessee did not file a return and did not comply with a notice under section 22(4). The only penalty that could be imposed was under section 28(1)(a). The second question was deemed unnecessary to answer due to the resolution of the first issue. The court did not direct the Commissioner of Income-tax to pay the costs of the assessee.
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