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TMI Blog1977 (10) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Indian Income-tax Act, 1922? (2) Whether, on the facts and in the circumstances of the case, a penalty can be imposed under section 46(1) of the Indian Income-tax Act, 1922, read with section 21 of the Excess Profits Tax Act, 1940, after 1st April, 1962, with effect from which date the Indian Income-tax Act, 1922, was repealed by the Income-tax Act, 1961?" The facts which have been found or admitted are as follows : The assessee was assessed to excess profits tax under the Excess Profits Tax Act for the chargeable accounting periods ending respectively on the 13th April, 1943, the 1st April, 1944, and the 18th April, 1945, for Rs. 4,49,802.66, Rs. 4,71,399 and Rs. 63,375. A notice of demand in respect of each assessment was serve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Income-tax Act, 1922, could not be levied thereafter. The Tribunal rejected the contentions of the assessee and held that the imposition of penalty under section 46(1) of the Act was not a proceeding for recovery of tax. Following a decision of the Bombay High Court in Jethalal Nagji Shah v. Municipal Corporation for Greater Bombay [1954] 25 ITR 207 the Tribunal also held that a repeal of the Indian Income-tax Act, 1922, did not affect the position vis-a-vis the Excess Profits Tax Act inasmuch as the provisions of the Indian Income-tax Act, 1922, had been incorporated in section 21 of the Excess Profits Tax Act. Mr. R. Murarka, learned counsel for the assessee, has contended at the hearing that the impugned orders did not merely i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such power was not available to the revenue. In the facts of the case, it was found assessments had been completed and found to be either nil or of only small amounts. On the facts of that case and in the circumstances, it was held that the revenue had no jurisdiction to impose penalty. Mr. Ajit Sengupta, learned counsel for the revenue, has contended on the other hand that there is no time limit in the Income-tax Act for imposition of penalty which was not a procedure for recovery of tax. As long as the tax remained recoverable under the general law, even if a special procedure for recovery under the Act had become time-barred, the revenue was entitled to assess and levy penalty. In support of his contentions Mr. Sengupta cited first th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to pay tax ; but by imposing penalty the amount demanded as tax is not recovered as such." The learned judge followed the decision of the Allahabad High Court in Chhotey Lal's case [1968] 69 ITR 709. Mr. Murarka has not contended specifically that imposition of penalty itself is a mode of recovery. What he really contended was that the impugned orders were something more than mere imposition of penalty and, therefore, should be considered to be steps and/or procedures for recovery. But what we are concerned with in the reference is "whether the penalty imposed under section 46(1) of the Indian Income-tax Act, 1922, is barred by limitation" ? Therefore, we cannot permit Mr. Murarka to argue a question which has not been referred to us. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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