TMI Blog1982 (2) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... lty proceedings under the 1961 Act cannot be taken against him. A penalty of Rs. 1,818 was, therefore, levied against the assessee. The order of the ITO was upheld by the AAC. However, in the appeal filed by the assessee, the Appellate Tribunal set aside the order of penalty. The Tribunal seems to have taken the view that s. 22(3) of the 1922 Act contemplates that if any assessee does not furnish the return within the time, allowed by sub-s. (1) or sub-s. (2), law permitted him to file a return or revised return at any time before the assessment was completed and that, in the instant case, the original return as well as the revised return must be considered as having been filed within the time prescribed by law since the returns were filed before the assessment was made. The Tribunal expressed the view that since s. 22(3) of the 1922 Act has been complied with, it logically followed that s. 22(2) must be held to have been complied with and, if such compliance has been made, the provisions of s. 271(1)(a) of the 1961 Act were not attracted. The Tribunal has relied on the decision of the Supreme Court in CIT v. Kulu Valley Transport Co. P. Ltd. [1970] 77 ITR 518, in which the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the 1922 Act. The provision which then becomes material in order to decide the validity of the view taken by the Tribunal is s. 28 of the 1922 Act, the material part of which reads as follows: " 28. (1) If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate Tribunal, in the course of any proceedings under the Act, is satisfied that any person (a) has without reasonable cause failed to furnish the return of his total income which he was required to furnish by notice given under subsection (1) or sub-section (2) of section 22 or section 34 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by such notice, or...... he or it may direct that such person shall pay by way of penalty, in the case referred to in clause (a), in addition to the amount of the incometax and super-tax, if any, payable by him a sum not exceeding one and half times that amount..." A bare reading of this provision will show that in so far as the present case is concerned, the omission to furnish a return of total income by the person who has been given a notice under sub-s. (2) of s. 22 or the failure to furnish a return without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the 1922 Act. Now, it is no doubt true that sub-s . (3) of s. 22 enables person to furnish a return or a revised return at any time before the assessment is made. But this provision, it appears to us, has no relevance when the question of liability under s. 28 to penalty is to be decided. Subs. (3) of s. 22 reads as follows: " If any person has not furnished a return within the time allowed by or under sub-section (1) or sub-section (2), or having furnished a return under either of those sub-sections, discovers any omission or wrong statement therein, he may furnish a return or a, revised return, as the case may be, at any time before the assessment is made." In the face of the express reference in s. 28 to the failure to file return when required to do so by a notice under s. 22(2) altogether or the failure to file such a return within the time prescribed by the notice under s. 22(2), the fact that s. 22(3) enables a return to be filed at any time before the assessment is made would be wholly irrelevant for the purposes of determining the liability to penalty under s. 28. Now, it is true that sub-s. (3) of s. 22 has been described by the Supreme Court as a proviso to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of determining the time within which a return has to be submitted It can well be said that section 22(3) is merely a proviso to section 22(1). Thus, a return submitted at any time before the assessment is made is a valid return. In considering whether a return made is within time, sub-section (1) of section 22 must be read along with sub-section (3) of that section. A return whether it is a return of income, profits or gains or of loss must be considered as having been made within the time prescribed if it is made within the time specified in section 22(3). In other words, if section 22(3) is complied with, section 22(1) also must be held to have been complied with. If compliance has been made with the latter provision the requirements of section 22(2A) would stand-satisfied." There is nothing in the observations quoted above which has the effect of affecting the penalty provisions expressly made in s. 28 of the 1922 Act. The decision of the Supreme Court would show that the relevant provision concerned in that case was s. 22(2A) because the question in the Kulu Valley Transport Co.'s case [1970] 77 ITR 518 (SC) was whether in the case of a voluntary return in which a l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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