9911796707
TMI Blog1969 (12) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Supreme Court as yet unreported, a copy of which has been supplied to me in the course of hearing of the present petition. In this petition the petitioner challenges the validity of a notice for imposing penalty issued by the respondent, the Income-tax Officer, under sections 271 and 2764 of the Income-tax Act, 1961. The assessment of the petitioner for the assessment year 1960-61 was completed under section 23(3) of the Income-tax Act, 1922, on 27th February, 1965. Subsequently, a notice dated the 26th February, 1965, under section 274/271 of the Income-tax Act, 1961, was received by the petitioner to show cause why penalty should not be levied for concealing particulars of income or deliberately furnishing inaccurate parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e failed to furnish the return of total income as required under section 139 or has without reasonable cause failed to comply with the notices under section 142 or section 143 or has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty---certain amounts are provided for---in each of the aforesaid cases of default according to certain percentages of the income that might have escaped assessment. Section 274 provides that no penalty should be imposed without giving the assessee an opportunity of being heard, while section 275 provides a period of limitation of two years from the date of completion of the assessment proceedings for imposing penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Madhya Pradesh High Court and a decision of the Allahabad High Court which have held that the provisions of section 297(2)(g) were intra vires the Constitution and that penalty proceedings could be initiated under section 271 of the new Act even in cases where the assessment had been made under the provisions of the repealed Act. In three unreported decisions of this court in Narendra Sharma v. Income-tax Officer, In re Sardarmull Kankaria (unreported) and In re Bansidar Durgadutt (unreported) T. K. Basu J., while expressing no opinion on the constitutional validity of section 297(2)(g), had accepted the second contention of Dr. Pal, viz., that no penalty proceedings could be initiated under section 271 of the 1961 Act, where the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same date, that is, November 23, 1964, the Income-tax Officer issued a notice under section 271/274 of the Income-tax Act, 1961, calling upon the firm to show cause why an order for penalty should not be passed on account of its failure to furnish the return within time. By an order dated November 19, 1966, the Income-tax Officer imposed a penalty of Rs. 1,03,434 under section 271(1)(a) of the 1961 Act. The firm having appealed in vain against the order of penalty applied under article 226 of the Constitution challenging the validity and constitutionality of, inter alia, section 297(2)(g) and section 271(2) of the 1961 Act. The High Court having rejected the application the firm went up on appeal to the Supreme Court. After setting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial treatment. It is not possible to say that while applying the penalty provisions contained in the Act of 1961 to cases of persons whose assessments are completed after 1st April, 1962, any class has been singled out for special treatment. It is obvious that for the imposition of penalty it is not the assessment year or the date of the filing of the return which is important but it is the satisfaction of the income-tax authorities that a default has been committed by the assessee which would attract the provisions relating to penalty. Whatever the stage at which the satisfaction is reached, the scheme of sections 274(1) and 275 of the Act of 1961 is that the order imposing penalty must be made after the completion of the assessment. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs have to be initiated and the penalty imposed in accordance with the provisions of section 271 of the Act of 1961. Thus the assessee would be liable to a penalty as provided by section 271(1) for the default mentioned in section 28(1) of the Act of 1922 if his case falls within the terms of section 297(2)(g)....Similarly, the provision of section 271 of the Act of 1961 will apply mutatis mutandis to proceedings relating to penalty initiated in accordance with section 297(2)(g) of that Act. " Dr. Pal made a valiant attempt to distinguish the aforesaid decision of the Supreme Court so far as the application of section 271 of the 1961 Act was concerned. While he conceded that the decision of the Supreme Court must be taken as conclusive on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
