COMMISSIONER OF INCOME TAX Vs. SANT SINGH

JUDGEMENT

(1.) THIS is a reference at the instance of the CIT under S. 256(2) of the IT Act, 1961. The respondent, Sant Singh, was called upon to file the return for the asst. year 1958 -59 under S. 22 (2) of the Indian IT Act, 1922. The return should have been filed on or before October 3, 1958. The return was, however, filed on August 14, 1962. The assessment was completed under S. 143(3) of the IT Act, 1961, on February 28, 1963. A demand of Rs. 15,739 was resulted.

(2.) SIMULTANEOUSLY , with the passing of the assessment order, the ITO issued a notice to the assessee under S. 294 r/w S. 271(1)(a) of the IT Act, 1961, calling upon the assessee to show cause why a penalty should not be imposed for the delay of three years and nine months in the filing of the return. Not satisfied with the explanation given by the assessee the ITO imposed a penalty of Rs. 7,869, being 50per cent of the tax due from the assessee. This order was confirmed by the AAC on appeal.

(3.) HOWEVER , on further appeal, the Tribunal while agreeing with the ITO and the AAC that the explanation given by the assessee for the delay in the filing of the return was not satisfactory and also agreeing with the penalty to be imposed under S. 271(1)(a) of the IT Act, 1961, took the view that the quantum of the penalty had to be determined bearing in mind that the default was committed at a time when the Indian IT Act, 1922, was in force. In their view, therefore, the penalty imposable should be commensurate with the penalty imposable when that Act was in force. They, therefore, imposed a penalty of Rs. 1,000 only and directed a refund of the excess amount to the assessee.