TMI Blog1966 (4) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... " The question arises in connection with recovery of excess profits tax for three chargeable accounting periods ending on 30th April, 1944, 30th April, 1945, and 31st March, 1946. In respect of these chargeable accounting periods, excess profits tax was assessed on 28th February, 1949, 25th March, 1949, and 25th March, 1949, bringing into existence demands of Rs. 3,60,324-11-0, Rs. 1,15,034 and Rs, 83,123-5-0. Demand notices were issued on the dates of the assessments. In response to these demand notices, the assessee moved applications on 17th March, 1949, and 31st March, 1949, for stay of recovery of the amounts assessed until the disposal of appeals which had been filed against the assessments. The appeals were actually disposed of by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the appeals and confirmed the imposition of the penalties. A further appeal before the Income-tax Appellate Tribunal was also dismissed. Thereupon, the assessee moved the Income-tax Appellate Tribunal under section 66(1) of the Income-tax Act read with section 21 of the Excess profits Tax Act to refer a question of law to this court and it is in pursuance of that application that the question quoted above by us has been referred to this court. The statement of the case and the judgment of the Income-tax Appellate Tribunal show that the imposition of the penalties was challenged on two grounds before the Income-tax Appellate Tribunal. One ground was that appeals in respect of assessments for earlier chargeable accounting periods were p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Excess Profits Tax Officer not to treat the assessee in default for sufficient reasons because further appeals were pending, but in this case the facts stated show that no prayer at all was made to the Excess Profits Tax Officer not to treat the assessee in default. All that was done was to contest the legal position by urging that the assessee was not in default ; that contention of the assessee was clearly incorrect. It is, therefore, quite clear that the assessee was liable to imposition of penalty under section 46(1) of the Income-tax Act read with section 21 of the Excess Profits Tax Act on the date on which the penalty was imposed, viz., 26th March, 1951. The pendency of the appeals in respect of earlier chargeable accounting pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that could be said in favour of the assessee was that no penalty should have been imposed until the assessee had been given an opportunity to say whatever he had to say in his defence. The learned single judge in arriving at the view, that the imposition of a penalty without giving an opportunity was not in consonance with the principles of natural justice, relied upon a decision of the Supreme Court in Nand Lal Raj Kishan v. Commissioner of Sales Tax, Delhi. It may be noticed that the Supreme Court in that case nowhere expressed the view that, when there was no express provision for the issue of notice, the issue of notice was compulsory and that an order made without issue of a notice would be invalid. All that the Supreme Court laid dow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that when the Excess Profits Tax Officer imposed the penalty on 26th March, 1951, he committed the error of not giving a specific opportunity to the assessee to show cause why the penalty should not be imposed. There is, however, the fact that, by his letters dated 25th October, and 26th October, 1950, the assessee was told that there were arrears outstanding which required payment or bank guarantee and the assessee was given a prescribed period of time to comply. It cannot be said that, in these circumstances, the assessee could not envisage that on failure to comply, the Excess Profits Tax Officer would apply the provisions of section 46(1) for imposing the penalty. In any case, even if any irregularity was committed by the Excess Prof ..... X X X X Extracts X X X X X X X X Extracts X X X X
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