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TMI Blog1983 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantum of penalty in the assessee's case ? The assessee, which is a private limited company, was served for the assessment year 1962-63, with a notice under s. 139(2) of the I.T. Act, calling upon the assessee to submit a return on or before November 16, 1962. The assessee, however, filed the return only on June 22, 1965. The ITO called upon the assessee to show cause why penalty should not be imposed under s. 271(1)(a). The assessee submitted its explanation stating that there was a strike by the employees in the year 1959, by reason of which the business had to be closed at Madras and shifted to another, place resulting in a lot of confusion and misplacement of the assessee's documents and papers. It was also pointed out that the accounts of the assessee for the year ended December 31, 1961, could not be finalised till July 12, 1963, when it was audited. Thus, the assessee contended that the delay was due to circumstances beyond its control and, therefore, it should be condoned. The ITO did not accept the said explanation and he found that even after the finalisation of the accounts on July 12, 1963, the return was not immediately filed; but it was filed long thereafter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (1)(a). Aggrieved by the decision of the Tribunal, the Revenue has sought and obtained a reference on the above two questions. In this reference we are not concerned with the period of delay in filing the return. That stands concluded by the decision of the Tribunal, which held that there is an unexplained delay of ten completed months in filing the return and, therefore, the levy of penalty is justified for the said delay of ten months. The only question that we have, to consider now is whether the assessee is entitled to the benefit of s. 22 of the Amending Act in view of the fact that it was an intervener in the decision in CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. For considering the above question, we have to naturally consider the scope and object of s. 22 of the Direct Taxes (Amendment) Act (26 of 1974). Before its amendment clause (i) of section 27l(1)(a) was as follows : " (i) in the cases referred to in clause (a), in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent. of the tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the tax". The above clause was delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the order of penalty in the case of such assessee for that particular year". The object of introducing the saving clause in s. 22 as seen from the explanatory notes given by the Board for bringing the amendment and for introducing the saving clause, which finds a place at page 220 of A. N. Aiyar's Indian Tax Laws (1975), Part III, is to give sanctity to the decisions of the Supreme Court. The Amending Act has specifically excluded from the operation of the amendment, cases in which the court has given a ruling adverse to the Revenue before September 3, ,1973, that is, the date of the introduction of the Direct Taxes (Amendment) Bill, 1973, in the Lok Sabha and the saving clause will apply only in relation to the order of penalty for the particular assessment year in respect of which the Supreme Court has given its ruling. The purport of s. 22 is that even though s. 271(1)(a)(i) has been amended by s. 13 of the Amending Act with retrospective effect, that will not affect the decisions rendered by the Supreme Court on the basis of the unamended section in the case of the particular assessee with reference to particular assessment years. To make sure that the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The entire batch of cases was heard by a Constitution Bench of the Supreme Court along with the appeals filed by the Indian Aluminium Company and Standard Vacuum Oil Company. The Supreme Court, after hearing The counsel, reserved judgment in the appeals filed by the Indian Aluminium Company and Standard Vacuum Oil Company. But, in view of the fact that an additional question relating to the inclusion of interest on borrowed moneys in the calculation of actual cost for the purposes of depreciation and development allowance arose in the appeal of the Standard Vacuum Refining Company, after hearing arguments, the Supreme Court directed that the appeal of that company be heard by a Division Bench after pronouncement of judgment in the appeals of the other two companies. The judgment was rendered by the Constitution Bench on the main question as to the allowability of wealth-tax as deduction under the I.T. Act. The judgment was pronounced on March 29, 1972. The appeal of the Standard Vacuum Refining Company was subsequently heard by a Division Bench and a decision was rendered therein after the passing of the Income-tax (Amendment) Act, 1972. While considering the question as to whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or similar questions are in issue, for the decision of this court will conclude the case of that party." In a subsequent decision in Khyerbari Tea Co. Ltd. v. State of Assam, AIR 1964 SC 925, the Supreme Court again pointed out that though party, who will be affected by the decision, if any, of the Supreme Court, can be allowed to intervene and address arguments in court in respect of the general question arising in the case in which he seeks intervention he has no right of reply. Having regard to the observations of the Supreme Court in the above two cases, that an intervener cannot seek any relief apart from making submissions on the general question arising in the case in which he has been allowed to come in as an intervener, the assessee's case cannot be taken to be the subject-matter of the decision of the Supreme Court either in an appeal or otherwise so as to attract s. 22 of the Amending Act referred to above. In fact, s. 22 refers to an appeal in respect of an order imposing penalty under cl. (i) of sub-s. (1) of s. 271 of the I.T. Act for any particular assessment year. Here, the levy of penalty on the assessee for any particular year was not the subject-matter of proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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