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Issues Involved:
1. Whether penalty under section 28(1)(a) of the Income-tax Act was exigible. Detailed Analysis: 1. Context and Background: The primary issue revolves around the applicability and exigibility of a penalty under section 28(1)(a) of the Income-tax Act, 1922. The assessee, an individual, filed a return for the assessment year 1957-58 on January 7, 1959, which was significantly delayed beyond the prescribed period. The Income-tax Officer accepted the turnover but computed the profits at a higher percentage than declared and initiated penalty proceedings under section 28(1)(a). The penalty was contested and reduced by the Tribunal. 2. Assessee's Contention: The assessee argued that the penalty under section 28(1)(a) was unjustified since the return was rejected, and the assessment was made on an estimated higher percentage of gross profits. The contention was that proceedings should have been initiated under section 28(1)(c) for suppression of income, and that sections 28(1)(a), 28(1)(b), and 28(1)(c) are mutually exclusive. 3. Examination of Relevant Provisions: The court examined sections 22 and 28 of the Income-tax Act. Section 22 mandates the filing of returns within the prescribed period, and failure to comply attracts penalty under section 28(1)(a). Section 28(1)(b) pertains to non-compliance with notices, while section 28(1)(c) deals with concealment or inaccurate particulars of income. 4. Court's Interpretation: The court interpreted that section 28 allows for penalties under different clauses depending on the nature of the default. It held that an assessee failing to file a return within the prescribed period is liable under section 28(1)(a), regardless of whether the return was eventually filed or not. The court rejected the argument that once a return is filed, the Income-tax Officer can only levy a penalty under section 28(1)(c). 5. Precedents and Judicial Opinions: The court referred to various precedents, including C. V. Govindarajulu Iyer v. Commissioner of Income-tax, where it was held that penalty under section 28(1)(a) could be levied for failure to furnish a return pursuant to a notice under section 22(1). The court also discussed the views of the Calcutta High Court and the Supreme Court, ultimately aligning with the latter's interpretation that proceedings under section 22(1) are initiated by the publication of notice, and non-compliance attracts penalty under section 28(1)(a). 6. Mutual Exclusivity Argument: The court addressed the argument of mutual exclusivity of sections 28(1)(a) and 28(1)(c), clarifying that these provisions are not mutually exclusive in the sense that action under one precludes action under the other. It emphasized that the Income-tax Officer has the discretion to choose the appropriate section based on the nature of the default. 7. Conclusion: The court concluded that the penalty under section 28(1)(a) was exigible and justified. It affirmed that the Income-tax Officer had the jurisdiction to levy the penalty for not filing the return in time, irrespective of the subsequent acceptance or rejection of the return. The question was answered in the affirmative and against the assessee, with costs fixed at Rs. 150. Final Judgment: The court answered the referred question in the affirmative, supporting the levy of penalty under section 28(1)(a) and against the assessee.
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