9911796707
TMI Blog1977 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner or the Tribunal. That is why Sri P. Rama Rao, learned standing counsel for the income-tax department, raised a preliminary objection as to the maintainability of the writ petition. He contended that the failure to raise these contentions before the appropriate authority and the Tribunal would be a bar to the maintainability of the present writ petition. We are not inclined to agree with Sri Rama Rao. It is for the reason that these two questions, particularly the one relating to the limitation, go to the very root of the matter. If we accept the petitioner's contention as to the bar of limitation, then the very imposition of penalty would become time barred and illegal. Therefore, we will proceed to consider the writ petition on its merits. The amount of penalty imposed on the petitioner is Rs. 9,168 and was imposed for filing of the return for the assessment year 1965-66 late. In this petition a writ of certiorari quashing the order imposing the penalty is sought. For the assessment year 1965-66 the Income-tax Officer made the assessment on 27th of December, 1969, fixing the income at Rs. 1,34,390. Simultaneously, he also initiated penalty proceedings by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion two years' period was fixed from the time when the proceedings, in the course of which action for imposition of penalty was initiated, have been completed. It can easily be seen that it was in general terms, possibly covering within its sweep many possibilities. Evidently Parliament, while recasting the section, was anxious to plug very many loop-holes and escape valves for imposition of penalty. That is why in the present section it has endeavoured to make a detailed provision. It is better to extract the section first. It is is follows : "No order imposing a penalty under this Chapter shall be passed-- (a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the Appellate Assistant Commissioner under section 246 or an appeal to the Appellate Tribunal under sub-section (2) of section 253, after the expiration of a period of-- (i) two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or (ii) six months from the end of the month in which the order of the Appellate Assistant Commissioner or, as the case may be, the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Additional Income-tax Officer [1963] 49 ITR 322 (Mad) and Shadilal Sugar and General Mills v. Union of India [1972] 85 ITR 363 (Ali) in support of his contention that it was the first assessment that was postulated by clause (a). A broad analysis of the section would show that wherever there has been an appeal against the assessment or other order, be it an appeal to the Appellate Assistant Commissioner or to the Appellate Tribunal, as the case may be, and if the matter reached a finality with the order of either authority, the period as fixed by sub-clause (ii) of clause (a) is six months from the end of the month in which the aforesaid final order is received by the Commissioner. The Commissioner being in overall superintendence over these matters and since he can examine the regularity of these proceedings, six months' time was fixed from the end of the month in which the order was received by him. In cases where the proceedings are not completed with the order of the Appellate Assistant Commissioner or the order of the Appellate Tribunal, patently clause (ii) would have no application. Supposing the Appellate Assistant Commissioner or the Appellate Tribunal has remanded the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the words "whichever period expires later" occur. Evidently, Parliament thought that certain matters may be governed by both the sub-clauses and in such an eventuality the longer period must be taken. The cases where there has been no appeal are governed by clause (b). We are not much concerned in this case with the import of the Explanation to the section. Applying the above analysis to the facts of the present case, there has been an appeal preferred by the assessee against the first assessment, thereby satisfying the requirement of main clause (a). The assessment proceedings, in the course of which action for imposition of penalty has been initiated, were completed only when the Income-tax Officer made a fresh assessment on 25th of July, 1972. By no stretch of imagination could it be said that they were completed by the original assessment order of 1969 or the order of the Appellate Assistant Commissioner remitting the matter back to the Income-tax Officer. The statement of facts disclose that there was no further appeal against the assessment made by the Income-tax Officer after remand. Logically, it should follow that the assessment proceedings were completed on 25th July ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able up to the date of the assessment made under section 23. The section itself calls this as the "regular assessment". Since section 18A(5), in clear terms, refers to the assessment tinder section 23 as the date up to which interest is payable, the above three decisions lay down that the original assessment made by the Income-tax Officer under section 23 would be the crucial date and not any other date. It is obvious that these cases were decided on the specific language of section 18A(5) read with section 23 of the 1922 Act. There is no such inhibition in section 275. Therefore, we see no possibility of the assessee deriving any support from these decisions. The second question relates to the quantum of penalty. A sum of Rs. 9,168 was imposed as penalty. The amount was fixed as per the provisions of section 271(1)(a)(i) read with section 271(2). Since this is a penalty referable to clause (a) of section 271(1), a sum equivalent to 2 per cent. of the tax for every month during which the default continued but not exceeding in the aggregate 50 per cent. of the tax may be imposed as penalty. The petitioner is a firm and, therefore, the department invoked sub-section (2) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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