1979 (3) TMI 54

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..... tated. For the assessment year 1959-60, the assessee was issued a notice under s. 22(2) of the Indian I.T. Act, 1922 calling for the return of income which was served upon the assessee on May 28, 1959. The return was due to be filed on or before July 2, 1959. However, the same was filed by the assessee on February 16, 1963, and thus a delay of 44 complete months was committed. The ITO completed the assessment on February 12, 1964, and while making the order wrote the following language: "Assessed. Issue requisite demand along with penalty notice in respect of the belated return." Thereafter the demand notice and the show cause notice for penalty were issued and the same were dated February 14, 1964. The assessee raised the plea that due .....

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..... d only thereafter the requisite penalty notice was issued. Section 274 provided that no order imposing penalty can be made unless the assessee was heard and reasonable opportunity was afforded to him. From the cumulative reading of ss. 271 and 274, it was argued that the order issuing the penalty notice followed after the assessment proceedings were completed. It was further pointed out that the actual notice regarding the penalty was issued two days after this order was made by the ITO. Bare reading of the order made by the ITO would rather indicate that it was a composite order regarding assessment as well as issuance of the penalty notice. It could not, therefore, be stated that the assessment proceedings were completed and only therea .....

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..... s from the date of the completion of the proceedings in the course of which the proceedings for the imposition of the penalty have been commenced. It is evident that before the completion of the proceedings regarding assessment, the order was passed for imposing penalty. It is further clear that in the course of this very proceeding the imposition of penalty did commence. The mere fact that the notice was actually issued two days after the said order was passed, was immaterial because the order itself contained a direction for imposition of penalty and that is how the proceedings for imposition of penalty commenced within the very same order. Therefore, there is no difficulty with regard to s. 275 and the proceedings regarding imposition of .....

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