9911796707
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Issues Involved:
1. Validity of show-cause notices dated 23-11-1964. 2. Validity of subsequent show-cause notices dated 27-7-1966. 3. Legality of penalty for assessment year 1962-63 u/s 271(1)(a). 4. Penalties for default in respect of time allowed for filing the return. 5. Penalty when the return was filed within the time allowed u/s 139(4). 6. Validity of orders u/s 271(1)(a) without specific details. 7. Imposition of penalty at a rate less than 2% for assessment years 1962-63 and 1963-64. 8. Continuation of default under section 139(1) up to the date of notice u/s 139(2). Summary: Issue 1: Validity of Show-Cause Notices Dated 23-11-1964 The court found that questions (1) and (2) do not arise for decision as the notices dated November 23, 1964, and July 27, 1966, clearly mentioned sub-s. (1) of s. 139. Therefore, these questions were not answered. Issue 2: Validity of Subsequent Show-Cause Notices Dated 27-7-1966 Similarly, the court found no defect in the notices dated July 27, 1966, and declined to answer question (2). Issue 3: Legality of Penalty for Assessment Year 1962-63 u/s 271(1)(a) The court held that the default under s. 139(1) continues until the return is filed, whether in response to a notice under s. 139(2) or s. 139(4). The default is not arrested or wiped out by the issuance of a notice under s. 139(2). Therefore, the penalty for the default under s. 139(1) was valid. Issue 4: Penalties for Default in Respect of Time Allowed for Filing the Return Question (4) was not pressed by the assessee's counsel and was answered against the assessee. Issue 5: Penalty When the Return Was Filed Within the Time Allowed u/s 139(4) The court held that filing a return under s. 139(4) does not absolve the assessee from the liability of penalty under s. 271(1)(a). The default continues until the return is filed. Issue 6: Validity of Orders u/s 271(1)(a) Without Specific Details The court found that the assessee was fully aware of the penalty proceedings and the grounds for the same. There was no prejudice caused to the assessee due to the non-mention of specific dates in the notices. Therefore, the orders were valid. Issue 7: Imposition of Penalty at a Rate Less Than 2% for Assessment Years 1962-63 and 1963-64 Question (7) was not pressed by the assessee's counsel and was answered against the assessee. Issue 8: Continuation of Default Under Section 139(1) Up to the Date of Notice u/s 139(2) The court held that the default under s. 139(1) continues until the return is filed. The issuance of a notice under s. 139(2) does not condone the default under s. 139(1). Therefore, the Tribunal's view that the default ceased on the date of the notice under s. 139(2) was incorrect. Conclusion: The court answered questions (3), (5), (6), and (8) against the assessee and in favor of the revenue. Questions (1) and (2) were not answered as they did not arise in the present case. Questions (4) and (7) were not pressed and were answered against the assessee. The reference was answered accordingly, with costs awarded to the revenue.
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