1981 (10) TMI 27

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..... only 10 months relating to the default of notices cls. 148 and that no penalty is leviable for the default committed under s. 139 in the course of the original assessment proceedings, nor such penalty proceedings could be initiated at the time of reassessments for the above years ? " The reference has been made to us in the following circumstances: Originally, assessments of the assessee, M/s. Marfatia Co., for the assessment years (for short A.Ys) 1965-66, 1968-69 and 1969-70 were completed by the ITO under s. 143(3) of the I.T. Act, 1961 (for short, " the Act "), on January 13, 1970, January 21, 1970, and January 21, 1970, respectively. There was some delay on the part of the assessee in filing the returns of income for the aforesaid .....

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..... ssee preferred an appeal before the AAC and contended that the assessee was under an honest impression that notices under s. 148 were invalid and that the period of delay could not be reckoned in the aforesaid manner by the ITO and at best it ought to have been held that there was a delay of 10 months only after service of notices under s. 148 of the Act. The AAC did not accept the assessee's contention that he was under an honest impression that notices under s. 148 were invalid. As regards the period of delay the AAC found that the total delay on the part of the assessee for the A.Ys. 1965-66, 1968-69 and 1969-70 was 43 months, i.e., 33 months in respect of the original assessment proceedings and a further period of IO months after issue .....

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..... ty notices were issued to the assessee, no penalty was actually imposed on the assessee in the course of the original assessment proceedings. Having thus not imposed any penalty on account of the delayed submission of returns and having passed the assessment orders, it was not open to the ITO to have taken into account the period of default for purposes of imposition of penalty envisaged by s. 271(1)(a) of the Act. Now, s. 271(1)(a) of the Act reads as under: " 271. (1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person (a) has without reasonable cause failed to furnish the return of total income which he was required to furnish under sub-sectio .....

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