9911796707
TMI Blog1970 (9) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... celled ? " The assessee, a firm, was registered by certificate issued on March 26, 1962, for the assessment year 1960-61. The firm was constituted on January 19, 1960, and the application under section 26A of the Indian Income-tax Act, 1922, was on March 1, 1960. The application is, therefore, in conformity with the rules framed under section 59 of the Indian Income-tax Act, 1922, and it is clear from rule 4 that the certificate of registration will have effect for the assessment year ending on 31st March, 1961. The registration of the firm had been renewed for the year 1961-62 as well. For the two years returns were submitted by the firm only on June 21, 1961, and April 6, 1962, respectively. Admittedly these returns had been submitted ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as sections 23(5), 26 and 28, proviso (d), and it is submitted that the income of the firm at least in so far as the shares of its partners are concerned are liable to be taxed under section 23(5) and that when penalty is to be imposed, the quantum of the penalty has got to be determined as, indicated in clause (d) of the proviso to section 28(1) and that this clause clearly indicates that even in cases where no tax can be imposed ,as such on the firm, a penalty can be imposed on the firm. Reliance has also been placed on the two decisions, one of the Calcutta High Court in Khushiram Murarilal v. Commissioner of Income-tax and the other of the Supreme Court in Commissioner of Income-tax v. S. V. Angidi Chettiarg, in support of the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of section 24: Provided further that when any of such partners is a person not resident in the taxable territories, his share of the income, profits and gains of the firm shall be assessed on the firm at the rates which would be applicable if it were assessed on him personally, and the sum so determined as payable shall be paid by the firm: Provided also that if at the time of assessment of any partner of a registered firm, the Income-tax Officer is of opinion that the partner is residing in Pakistan, the partner's share of the income, profits and gains of the firm shall be assessed on the firm in the manner laid down in the preceding proviso and the sum so determined as payable shall be paid by the firm ; and (b) in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome profits and gains of the previous year : Provided that, when the person succeeded in the business, profession or vocation cannot be found, the assessment of the profits of the year in which the succession took place up to the date of succession, and for the year preceding that year shall be made on the person succeeding him in like manner and to the same amount as it would have been made on the person succeeded or when the tax in respect of the assessment made for either of such years assessed on the person succeeded cannot be recovered from him, it shall be payable by and recoverable from the person succeeding, and such person shall be entitled to recover from the person succeeded the amount of any tax so paid." " 28. Penalty for con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm as actually returned by the firm." Only a person who without reasonable cause fails to furnish the return of his total income which he was required to furnish by notice given under sub-section (1) of section 22 is liable to be penalised for failure to submit a return generally. Section 22(1) enjoins on every person " whose total income during the previous year exceeded the maximum amount which is not chargeable to income-tax to furnish " within the stipulated time a return in the prescribed form and verified in the prescribed manner. Reading this section leaves no doubt in our minds that only persons whose total income during the previous year exceeded the maximum amount which is not chargeable to income-tax are liable to be penalised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 28(1)(a). The meaning that counsel for the revenue seeks to place on section 22(1) that if any income is liable to tax under the Act--the assessee, a firm for instance, whose income it is not--the assessee therefore must file a return, cannot be given to the section. Nor are we satisfied that the two decisions relied on by counsel are of any help in resolving the question before us. In one case the penalty, was imposed for concealing income and in the other for failure to produce accounts. We see also no force in the contention that the registration certificate being issued only on March 26, 1962, the assessee had an obligation to file a return under section 22(1). As we pointed out earlier, the certificate will have effect for the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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