1989 (8) TMI 110 - AT - Income Tax

Summary

Issues Involved:
1. Legality and propriety of penalty imposed under section 271(1)(a).
2. Proof of timely filing of return by the assessee.
3. Limitation period for imposing penalty under section 275.

Issue-wise Detailed Analysis:

1. Legality and propriety of penalty imposed under section 271(1)(a):

The primary issue in this appeal was whether the penalty under section 271(1)(a) was rightly, properly, and legally imposed. The Tribunal concluded that the levy of penalty was not proper and justified in law. The assessee argued that the return was filed on time and what was submitted later was a duplicate. However, the Income-tax Officer (ITO) and the Commissioner (A) did not accept this explanation, leading to the imposition of the penalty.

2. Proof of timely filing of return by the assessee:

The assessee claimed to have filed the return in June 1975 and submitted a return marked as 'duplicate' on 20-2-1979 before the notice under section 148 was issued on 2-3-1979. The proof offered was a photostat copy of the challan for payment of tax under section 140A on 5-1-1976. The ITO required the assessee to prove the original filing, but the assessee could not produce the receipt or acknowledgment. The Tribunal noted that the payment of self-assessment tax in January 1976 did not necessarily imply that the return was filed in June 1975. The Tribunal found it suspicious that the return was marked as 'duplicate' before the notice under section 148 was issued and concluded that the return could not have been filed in June 1975 as claimed.

3. Limitation period for imposing penalty under section 275:

The Tribunal examined the limitation period for imposing penalties under section 275, which prescribes the time limit for the imposition of penalties. The relevant dates were considered:
- 30-9-1979: Date of passing the assessment order.
- 22-8-1980: Date of passing the first order by the Commissioner (A).
- 23-12-1981: Date of order of the Commissioner (A) recalling the above order.
- 30-4-1983: Date of fresh order of the Commissioner (A).
- 7-10-1983: Penalty order passed by the ITO.

The Tribunal concluded that the period of limitation started from the end of the month in which the first order of the Commissioner (A) was received, i.e., 23-12-1981. The law of limitation does not allow for the stoppage or suspension of the running period unless the statute permits it. Therefore, the penalty order passed on 7-10-1983 was time-barred. The Tribunal emphasized that once the period of limitation had expired, it could not be revived by subsequent events. The penalty order passed by the ITO was thus beyond the period prescribed under section 275 and could not be upheld.

Conclusion:

The Tribunal allowed the appeal filed by the assessee, concluding that the penalty imposed under section 271(1)(a) was not justified in law and that the penalty order was time-barred under section 275.