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TMI Blog1957 (9) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax, Madras, in I.T.R. No. 327/55 dated October, 10, 1955, (Exhibit D). The first respondent is the Commissioner of Income Tax, Madras, and the second, the First Additional Income Tax Officer, Kozhikode. 2. In Exhibit B, an order under section 28(1)(a) and (b) of the Indian Income Tax Act, 1922, the second respondent said: A clear case of deliberate default exists in this case. With the previous approval of the Inspecting Assistant Commissioner of Income Tax, Coimbatore, I levy a penalty of ₹ 1,300. This should be paid on or before December 30, 1953. 3. The petitioner appealed to the Appellate Assistant Commissioner of Income Tax, Kozhikode Range, Kozhikode, and succeeded in getting the penalty reduced to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion fails. (Exhibit D). 5. Section 28 of the Indian Income Tax Act, 1922, makes provision, in the words of Kanga, for the imposition of a penalty on contumacious or fraudulent assessee. Sub-section (1) of that section (omitting the proviso thereto) is in the following terms: If the Income Tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, in the court of any proceedings under this Act, is satisfied that any person - (a) has without reasonable cause failed to furnish the return of his total income which he was required to furnish by notice given under sub-section (1) or sub-section (2) of section 22 or section 34 or has without reasonable cause failed to furnish it within the time allowed and in the manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under section 28(1)(a). Issued order under section 23(4). This shows that the Income Tax Officer was satisfied in the course of proceedings and not subsequent thereto. The fact that Exhibit B is of November 30, 1953, is immaterial and cannot affect the question. 8. In Guru Prosad Shaw v. Commissioner of Income Tax, Gentle, J., said: All that section 28 requires is that there should be a discovery and the person discovering it is satisfied that an assessee had concealed particulars of his income or deliberately furnished inaccurate particulars, in the course of any proceedings under the Income Tax Act. There is nothing in section 28 from which it can be said that the notice under sub-section (3) must be given before the conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted by the Income Tax Officer after the assessment is completed, and that it is not necessary that the penalty proceedings should be started during the pendency of those proceedings in the course of which the default of the assessee is discovered. The contrary view taken by the Lahore High Court in Banarsi Das v. Commissioner of Income Tax is, it is submitted, incorrect. 10. Sub-section (3) of section 28 provides: No order shall be made under sub-section (1) or sub-section (2) unless the assessee or partner, as the case may be, has been heard, or has been given a reasonable opportunity of being heard. The second contention urged before me is that no notice was issued to the petitioner, that as a result he had been denied a reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to your above letter I am to inform you that I am unable to give a copy of the penalty notice, as a copy is not available on file. 12. That the petitioner did receive notice under section 28(3) will be clear from Exhibit I dated January 18, 1952, and Exhibit II dated February 6, 1952, letters of the petitioner to the First Additional Income Tax Officer, Kozhikode. Exhibit I reads as follows: Your notice under section 28(3) for imposing penalty. I was shocked to get a notice under the above section, which was redirected to me by my brother two days back. I am here for the last one fortnight under treatment by undergoing injections to my filarial complaint in the right leg. I expect a delay of one week more to return; and hence I b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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