1957 (9) TMI 72 - HC - Income Tax

Summary

Issues:
Challenge against the imposition of penalty under section 28(1)(b) of the Indian Income Tax Act, 1922, by the First Additional Income Tax Officer, Kozhikode, and subsequent modifications by the Appellate Assistant Commissioner of Income Tax, Kozhikode Range, Kozhikode, upheld by the Commissioner of Income Tax, Madras.

Analysis:

1. Imposition of Penalty and Reduction:
The petitioner sought a writ of prohibition against the collection of a penalty of Rs. 650 imposed by the First Additional Income Tax Officer, Kozhikode, under section 28(1)(a) and (b) of the Indian Income Tax Act, 1922. The Appellate Assistant Commissioner reduced the penalty to Rs. 650, citing that the default under section 22(2) was not deliberate, but upheld the penalty for the default under section 22(4). The petitioner then moved for a revision of the order under section 33A(2) of the Act, which was dismissed by the Commissioner of Income Tax, Madras. The penalty was imposed based on deliberate default, with the Appellate Assistant Commissioner reducing it due to the nature of the defaults under different sections.

2. Satisfaction of Default and Compliance with Notice:
The petitioner contended that the Income Tax Officer was not satisfied about the default under section 22(4) during the proceedings, rendering the penalty order invalid. However, the court found that the officer was satisfied during the proceedings, as evidenced by the assessment order and subsequent actions. The judgment cited previous cases to support the notion that satisfaction of default during the proceedings is sufficient for penalty imposition.

3. Opportunity of Being Heard:
Another contention was the lack of notice to the petitioner, denying him a reasonable opportunity of being heard as required under section 28(3) of the Act. The petitioner claimed no notice was served, but documents showed that notices were indeed received and responded to by the petitioner, indicating compliance with the statutory requirements. The court dismissed this contention based on the evidence presented.

4. Dismissal of Petition:
Ultimately, the court found both contentions raised by the petitioner to be untenable. The petition was dismissed with costs, including advocate fees. The court also rejected the argument that certain contentions were not raised in the appeal before the Appellate Assistant Commissioner, stating that the petitioner was not entitled to raise them at a later stage in court.