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TMI Blog1970 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... atia, (3) Mahabir Prosad Jatia, (4) Deokinandan Jatia, (5) Sreemohan Jatia, (6) Smt. Tribeni Devi Jatia, (7) Smt. Rammurti Jatia, (8) Smt. Pushpa Jatia and (9) Smt. Ratni Jatia. The returns of the income of the business carried on by Onkarmull Kanailall & Co., up to and including the assessment year 1958-59, have been filed in the status of a registered firm but in all these years the business has been treated to be the proprietary concern of Kanailall Jatia and the income therefrom included in the personal assessment of Kanailall though as a protective measure assessments have also been made on the firm as an unregistered firm. For one of those years an appeal was taken to the Income-tax Appellate Tribunal which upheld the contention of the department that the business was the proprietary business of Kanailall jatia. The said Kanailall Jatia died on the 19th January, 1958, leaving him surviving his four sons and and his widow, who are the petitioners in the present application, as his heirs and legal representatives. In respect of the assessment year 1959-60, relevant to the accounting period 23rd October, 1957, to the 10th November, 1958, a return was filed on behalf of the partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arily on the 14th November, 1963, when it should have been filed by the assessee by June, 1959, under section 22(1) of the Income-tax Act, 1922. As there was a default in filing the return for four years and four months and as the assessee could not give any satisfactory explanation therefor, in spite of opportunity being given, the above amount was directed to be paid by the assessee as penalty under section 271(a) The penalty was calculated at 50 per cent. of the total amount of tax demanded. On the same date the second order of penalty purported to be under section 273 of the 1961 Act was made by the respondent-Income-tax Officer, directing the Hindu undivided family to pay a penalty of Rs. 4,081.40 for failure to file an estimate under section 18A(2) of the 1922 Act. It should be mentioned here that on the application of the petitioners a rule nisi was issued by this court directing the present respondents to show cause why the two assessments for the year 1959-60 should not be cancelled and/or set aside. The above rule has since been discharged by B. C. Mitra J., on the ground that it was not necessary to decide the issue as to whether the assessments were illegal. The petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturns were in continuation of the original return filed there is no question of any default in filing the return within the time mentioned in section 22(1). An assessee can file a return under section 22(3) only when be has not furnished a return within the time allowed. Where a return has already been filed he can only file a revised return. The well-known decision of the Supreme Court in Ranchhoddas's case was relied on for the proposition that a return can be filed in answer to the notice under section 22(1) at any time before the assessment and the Income-tax Officer cannot choose to ignore the return. Similar observations were also made in some of the subsequent decisions of the Supreme Court, as for example, in the case of Raman Chettiar. Dr. Pal next contended that as the original return was filed before the 1961 Act came into operation the assessment made in this case and all proceedings thereunder including the proceedings for penalty should have been taken under the provisions of the 1922 Act and the penalty proceedings initiated under sections 271 and 273 of the 1961 Act were bad. Dr. Pal further contended that even if the assessment was not challenged on appeal and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned, for the assessment year 1959-60 it is at the most a case of failure to furnish the return and not a case of a failure to furnish a return within the time allowed. If any penalty was leviable it would have been leviable either under section 28(1)(a) of the 1922 Act or section 271(a) of the 1961 Act for having without reasonable cause failed to furnish the return of income under the respective sections of the two Acts. In this case the penalty under section 271(a) has been imposed on the basis of default in filing the return for four years, that is to say, for late filing of the return and the penalty has been calculated at 50 per cent of the total tax demanded. In fact the impugned order for penalty shows that the respondent-Income-tax Officer has treated the return filed by the firm in 1963, as the voluntary return filed by the Hindu undivided family. As there is no question of any failure of the assessee Hindu undivided family to furnish its return within the time allowed, the order for penalty must be held to be erroneous. As regards the order of penalty under section 273 of the 1961 Act for failure to file an estimate of advance tax under section 18A(2) of the 1922 Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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