P UMMALI UMMA Vs. INSPECTING ASSISTANT CIT ERNAKULAM

JUDGEMENT

(1.) This is an application for the issue of an appropriate writ for quashing an order imposing a penalty upon the petitioner under S.271 of the Indian Income Tax Act 1961, hereinafter referred to as the Act. For the assessment year 1954-55, the petitioner did not file her return. After the close of the year in question the Income Tax Officer found in dealing with the assessment of her son Sri M. K. Mohammed Kunji, that there were certain deposits in the name of the petitioner in a Bank. As the Income Tax Officer had reason to believe that by reason of the failure on the part of the assessee to make a return, her income chargeable to income tax for the year had escaped assessment, he issued a notice under S.34(1)(a) of the repealed Act calling upon the petitioner to file a return of the escaped income. A return was filed by the petitioner and an assessment was made under S.23(3) read with S.34(1)(a) of the Income Tax Act, 1922. The petitioner filed an appeal against the assessment order to the Appellate Assistant Commissioner. That appeal was dismissed on 2 1 1963. Against this order she filed an appeal before the Appellate Tribunal and the Appellate Tribunal by its order dated 29-5-1964 allowed the appeal in part. As the petitioner deliberately concealed the particulars of her income the 2nd respondent referred the case to the 1st respondent as the minimum penalty that will have to be imposed would exceed Rs. 1,000. The 1st respondent thereafter issued a notice under S.274(2) read with S.271 of the Act calling upon the petitioner to show cause why a penalty should not be imposed. The petitioner gave an explanation. After considering the explanation the 1st respondent passed the order impugned in this case imposing upon the petitioner a penalty of Rs. 5,896 on the ground that the petitioner has deliberately concealed the particulars of her income. Ext. P-1 is a copy of that order. The petitioner filed an appeal against Ext. P-1 order before the Appellate Tribunal, Madras. It is slated that the appeal has not been disposed of. The order imposing the penalty was followed by a notice demanding the amount. The petitioner questions the validity of Ext. P-1 order on various grounds.

(2.) The main submissions on behalf of the petitioner were: (1) that no proceedings could have been started under S.271 of the Act as under S.297 of the Act proceedings for the imposition of penalty could only be initiated under the repealed Act of 1922 and therefore the proceedings in the instant case ought to be quashed, and (2) that the petitioner is being subjected to a greater penalty than that which was in force at the time of the commission of the offence in that the petitioner stands in danger of being prosecuted under the Act from which he was immune under S.28(4) of the Income Tax Act, 1922.

(3.) As regards the contention that since there was a reduction in the assessable income of the petitioner by the order of Appellate Tribunal, the order impugned requires reconsideration, I need only say that as the petitioner has already filed an appeal against the order imposing the penalty, it is open to the appellate authority to consider the question whether any modification in the order appealed against is necessary in view of the fact that there has been a reduction in the assessable income of the petitioner by the appellate tribunal.