TMI Blog1979 (3) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... an I.T. Act, 1922, were issued to the assessee after March, 1953, after no effective response was received by the ITO in respect of his earlier notices. It was only on 17th of February, 1955, that the assessee admitted receipt of notices under ss. 22(4) and 23(2) of the Act and by that letter he informed the ITO that he had filed returns with the ITO, Calcutta. The ITO, Gwalior, who was in charge of the assessment was requested by the assessee to transfer his case to the ITO, Calcutta. However, on inquiry the ITO, Gwalior, did not find that there was any assessment case pending with the ITO, Calcutta, and the ITO, Gwalior, therefore, fixed the case for hearing on 21st March, 1955, and sent a telegram to the assessee communicating the date. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who found that the maximum penalty under s. 28(1)(b) worked out to Rs. 62,644. He,however, imposed a penalty of Rs. 25,000 only. In appeal the same contentions were raised by the assessee and were rejected by the AAC. The assessee took the matter in appeal to the Tribunal where also the same contentions were agitated. The Tribunal confirmed the decision of the AAC. The assessee held that the penalty order was not defective and that the explanation which was sought to be given by the assessee at that stage that the assessee was under a genuine mistake for not complying with the notices under ss.22(4) and 23(2) was not justified. The order of the Tribunal, however, does not disclose as to what was the mistake which was canvassed before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs have been delayed. Now, it is obvious that there is no provision anywhere in the Indian I.T. Act, 1922, which prescribes any limitation for completing the penalty proceedings. In the case of Mohd. Atiq [1962] 46 ITR 452 (All), on which the assessee has relied, it was held that no period of limitation has been prescribed for imposing penalty ; proceedings for levy of penalty, but the proceedings must be taken within a reasonable time. The proceedings in that case were for levy of penalty for non-compliance with notices issued under the law and were taken after the expiry of about 14 years, and it was held that there was unreasonable delay in commencing the proceedings. It appears from the facts of that case that the learned judge in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against him without considering his written reply, which was filed by him on 4th December, 1958, approached the High Court for the issue of a writ of prohibition, restraining the ITO from proceeding further in the matter of imposing penalty. This petition was withdrawn by the petitioner but after the withdrawal of the petition, an order of penalty was served on him on 17th January, 1959. The petitioner then filed a second petition which was disposed of by the learned judge in which certain observations in regard to the delay have been made. The decision shows that the learned judge took the view that the proceedings should be taken within a reasonable time and that a period of 14 years could not be said to be unreasonable. The decision c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to read the decision in Mohd. Atiq's case [1962] 46 ITR 452 (All) as laying down a proposition that a delay invalidates an order of penalty. The Orissa High Court has also taken a similar view that since the Indian I.T. Act of 1922 does not contain any provision prescribing the period within which an order of penalty should be made, no such order can be held to be bad in law merely because of inordinate delay (See CIT v. Rupsa Rice Mill [1964] 54 ITR 328 (Orissa)). The facts in the instant case, to which we have adverted earlier, indicate the circumstances under which the delay has occurred. The case of the petitioner was being transferred from place to place. Till 30th July, 1960, the penalty proceedings were stayed at the instance o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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