TMI Blog1973 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Act, 1922, dated November 14, 1961, which was served on the assessee, Shri Roshan Lal Kuthiala, on November 30, 1961, for the assessment year 1958-59. The assessee applied for time till February 15, 1962, for filing the return of income, but he actually filed that return on May 7, 1962, showing an income of Rs. 3,38,591. Provisional assessment was made on May 23, 1962, and the tax of Rs. 2,27,307.84 as demanded was paid in time. Regular assessment was made on an income of Rs. 3,44,668 by order dated December 31, 1962, and the tax determined was Rs. 2,66,794. The assessee was given credit for Rs. 2,25,337, the amount paid under the provisional assessment, after some minor adjustments and the demand notice under section 156 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sections 274 and 275 of the Income-tax Act, 1961 ; (ii) the tax payable, if any, has been wrongly interpreted to be the gross tax as determined whereas the tax payable as per the demand notice under section 156 was Rs.41,456.67 and, therefore, the penalty is disproportionate to the tax payable ; (iii) in proceedings under section 34, no notice can be taken of the default, if any, committed under section 22(1) ; (iv) by virtue of the assurances given on the floor of the House at the time of bringing on the statute book the provisions of section 22(1), no penalty could be imposed for default under section 22(1) ; (v) rate of penalty, i.e., 2 per cent. does not mean mere mathematical calculations, but it can also mean penalty from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period from February 15, 1962, to May 7, 1962 ; and (viii) that the penalty should be recomputed for the default as determined on the basis of the tax payable as asked for in the notice of demand, that is, Rs. 41,456. Thus the Tribunal allowed substantive relief to the assessee but, feeling dissatisfied, the assessee asked for a reference under section 256(1) of the Income-tax Act, 1961. The Tribunal has referred the following two questions of law for this court's opinion : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal has rightly refused to take notice of the assurances given on the floor of the House at the time of the enactment of section 28 of the Act of 1922 ? 2. Whether, on the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h other particulars as may be provided for in the notice) his total income during the previous year." Under this provision, no person was required to file his return of income till he received a notice from the Income-tax Officer. This section was amended by section 24 of the Indian Income-tax (Amendment) Act, 1939 (7 of 1939), as a result of which sub-sections (1) and (2) of section 22 read as under : " (1) The Income-tax Officer shall, on or before the 1st day of May in each year, give notice, by publication in the press and by publication in the prescribed manner, requiring every person whose total income during the previous year exceeded the maximum amount which is not chargeable to income-tax to furnish, within such period not bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice given under sub-section (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 income-tax and super-tax, if any, payable by him, a sum not exceeding one and a half times that amount, and in the cases referred to. . . . ." A combined reading of sections 22(1) and 28, as amended, makes it clear that every person who had an assessable income had to file the return of his income within the period stated in the public notice issued under sub-section (1) of section 22 and, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has held that the failure of the assessee to file the return of his income up to February 15, 1962, was not without reasonable cause and, therefore, no penalty could be imposed for late filing of the return till that date. The Tribunal has, however, found that the default in filing the return from February 15, 1962, to May 7, 1962, was without reasonable cause. For that period, the alleged assurance given on the floor of the House that the practice of issuing individual notices to the assessees would be continued and no penalty would be levied if the return was not filed by an assessee within the time prescribed in the public notice cannot avail the assessee to avoid the penalty consequent on the default in filing the return between Febru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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