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TMI Blog1972 (5) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... t is, roughly after a delay of 31 months. The Income-tax Officer applying the provisions of section 271(1)(a) of the new Act calculated the penalty leviable at 2 per cent. of the tax for each month of default. That figure would come to Rs. 1,49,000 and odd which would have been in excess of 50 per cent. of the tax. The Income-tax Officer accordingly restricted the quantum of penalty to 50 per cent. of the tax thereby levying the aforesaid amount of penalty. On appeal one of the contentions, inter alia, was that the initiation of the proceedings for the levy of penalty should have been taken within the time as required under section 275 of the new Act. The Appellate Assistant Commissioner observed in respect of this contention that since th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas the assessment proceedings were completed on March 20, 1963, the proceedings for penalty were started long after that date. There was, therefore, no valid commencement of the proceedings for penalty, and consequently, the order of penalty could not be sustained. On behalf of the income-tax department it was argued that the notice under section 274 should be deemed to be a notice in continuation of the notice under section 28(3) which had admittedly been issued on April 18, 1960, i.e., much before the completion of the assessment proceedings. The Tribunal did not accept that argument because in its view the notice under section 274 of the new Act could not be held to be a notice in continuation of the notice under section 28(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e corresponding provision of the new Act and the imposition of penalty was valid. In Commissioner of Income-tax v. Bankey Lal Hira Lal (I.T.R. No. 592 of 1968 decided on 23-12-1971), a Division Bench of Allahabad High Court dealt with a similar question. That was a case where the Income-tax Officer recorded in the assessment order that " question for penalty for concealment of income under section 271/274 will also be taken ", and the notice was issued under the new Act long after the completion of the assessment order. The High Court observed that : " In our opinion, the contention is without force. No such implication can be spelled out from section 275. The section, in its essential content, is a provision prescribing the period of limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise of the jurisdiction. " In Kishanlal v. Commissioner of Income-tax, a Division Bench of the Madhya Pradesh High Court held that an assessee is liable to penalty under section 271(1) of the new Act for his defaults referred to in section 28(1) of the old Act in respect of any assessment for the year ending on 31st March, 1961, or any earlier year, which is completed on or after 1st April, 1962. In the case of Jain Brothers v. Union of India, their Lordships of the Supreme Court, while construing the language of section 271, observed : " We are further unable to agree that the language of section 271 does not warrant the taking of proceedings under that section when a default has been committed by failure to comply with a notice issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modifications. In other words, the procedure of the new Act will apply to cases contemplated by section 297(2)(j) of the new Act mutatis mutandis. Similarly, the provisions of section 271 of the Act of 1961 will apply mutatis mutandis to proceedings relating to penalty initiated in accordance with section 297(2)(g) of that Act. Shri G. C. Sharma, counsel for the Commissioner of Income-tax, submitted that the provisions of section 297(2)(j) are identical with the provisions of section 297(2)(g). Shri D. S. Randhawa, appearing for the assessee, submitted that in the instant case there was no default on the part of the assessee at all. He conceded that in accordance with the period prescribed by section 22(2) of the old Act returns should ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return. He relied upon a decision of the Supreme Court in Commissioner of Income-tax v. Kulu Valley Transport Co. P. Ltd. That case has, however, nothing to do with the question arising for decision in the present case. The only question involved in that case was with regard to the loss returns filed by the assessee and their consequences on the question of carrying forward that loss inder section 24(2) of the old Act. The question was answered in the light of the provisions of sub-section (2A) of section 22 which was added to section 22 by section 14 of Act No. 25 of 1953 with effect from April 1, 1952. That sub-section deals with a case of a person who has not been served with a notice under sub-section (2) of section 22. In the insta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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