REDDY K P Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal has referred the following question for our opinion, namely : "Whether penalty under s. 28(1) (a) of the Act was exigible ?"

(2.) THIS question arose in the following circumstances : The assessee, who is an individual, filed a return for the asst. yr. 1957-58, for which the relevant accounting period is the year ended March 31, 1957, on January 7, 1959, long after the time within which he should have filed a return in accordance with a public notice given under s. 22(1) of the IT Act, 1922. In that return, he declared an income of Rs. 1,601. The ITO while accepting the turnover did not accept the 1per cent basis in arriving at the profits, and computed the profits at 25per cent. At the same time, he gave a notice to show cause why he should not levy a penalty under s. 28(1) (a) of the IT Act. In that proceeding, after considering his reply to the show cause notice, the ITO levied a penalty of Rs. 2,250. The assessment itself was subjected to an appeal. The AAC estimated the profits at 20per cent. The CIT, however, on revision reduced it to 15per cent.

(3.) BEFORE we consider this judgment, it is necessary to examine the relevant provisions of ss. 22 and 28. The provisions are given below :