TMI Blog1976 (6) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... vagueness in the penalty order of the Income-tax Officer and so the order cannot be said to be a legal and speaking order ?" A penalty of Rs. 16,120 had been levied by the Income-tax Officer, A-Ward, Digboi (Shri G.N. Hazarika) by his order dated March 16, 1969, under section 271(1)(a) of the Income-tax Act, 1961, on the assessee, which is a registered firm, in respect of the assessment year 1962-63 in the following circumstances: The concerned income-tax return had been filed on December 11, 1963, but was returned by the Income-tax Officer for re-submission along with the profit and loss account and the balance-sheet; it was again filed on April 10, 1964. It is common ground that the return must be taken as having been filed on December ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... error for "fourteen"); in saying so, the Income-tax Officer obviously thought that the default arose under section 139(1). The Income-tax Officer did not even realise that the default could not, in any case, be for more than 12 months. Mr. J. P. Bhattacharjee, learned counsel for the assessee, has brought to our notice the fact that, by a general notification, time for submission of returns had been extended by two months and this period of two months had also to be added to the period of six months (it is now only four months according to the later amendment of section 139(1), of the Income-tax Act). In the first place, the Income-tax Officer had made a mistake in recording the period of default as being "more than 14 months", whereas it s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his income or deliberately furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,-- (i) in the cases referred to in clause (a), in addition to the amount of the tax, if any, payable by him, a sum equal to two per cent. of the tax for every month during which the default continued, but not exceeding in the aggregate fifty per cent. of the tax; (ii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum which shall not be less than ten per cent. but which shall not exceed fifty per cent. of the amount of the tax, if any, which would have been avoided if the income returned by such person had been accepted as the correct income; (iii) in the cases refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lukdar, learned counsel for the revenue, contends that if there is any mistake in computation of the penalty, the same cannot be characterised as "vagueness", making the imposition of the penalty itself illegal, and that if the relevant date can be picked up from the records, that should be sufficient to validate the order. He relies, in this connection, upon the decision of a Division Bench of this court in Commissioner of Income-tax v. Smt. Ratna Kanti Bhuyan [1976] 103 ITR 397 (Gauhati). But, a perusal of the said decision shows that there was no question raised in that case about the absence of a definite starting point (date of default) or even about the correctness of the amount imposed as penalty; the date of the commencement of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as being vague (vagueness in the order of the Income-tax Officer), it seems apparent that the real import of the said finding is that vagueness was due to the fact that no precise starting point of time, relevant to the imposition of penalty, could be fixed and, hence, the same was invalid. It seems to us that fixing precisely the starting point (commencement) of the default is basic to the imposition of penalty; in other words, no valid penalty could be levied unless a definite starting point is found. It may be worth a repetition to state that the validity of the order of imposition of penalty would depend upon the fixing (finding) of a precise and definite starting point. The Act makes a distinction between registered and unreg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was invalid. Regarding the first submission, it is now well-settled that in a reference of this kind, where the High Court exercises advisory jurisdiction and does not function as a court of appeal, the finding of fact made by the Appellate Tribunal has to be accepted, except where, for instance, the finding itself is based on no evidence. (Vide [1976] 102 ITR 1217 (SC)--Anil Kumar Roy Chowdhury v. Commissioner of Income-tax). The finding of the Tribunal in this case, set out already, is that the starting point (commencement) of the period of default started could not be fixed definitely; on this finding it would follow that there could not be a valid imposition of penalty in such a case. Even apart from this consideration, when there are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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