INDRA AND COMPANY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE are two connected writ petitions which can be conveniently disposed of by a single order. The petitioner in both the cases is the same, i.e., Messrs. Indra and Company, a registered firm carrying on business in iron and steel. Writ petition No. 791 of 1973 pertains to the assessment year 1962-63 whereas Writ Petition No. 1392 of 1973 is with respect to the assessment year 1960-61. The ITO imposed penalty on the petitioner for both the years for not filing the return within time.

(2.) WE may take up the facts of Writ Petition No. 791 of 1973. The assessee did not file the return of its income for the assessment year 1961-62 within the time specified in the notice under section 22(1) of the Indian I.T. Act of 1922. A notice was accordingly served on it, under section 22(2) on May, 1961. It should have filed the return by July 4, 1961, but it actually filed it on December 28, 1962, after a delay of more than 17 months. The assessment was completed on April 19, 1963, and a notice was issued to the assessee on the same day calling upon it to show cause why a penalty should not be levied under section 271(1)(a) of the I.T. Act, 1961. The ITO was not satisfied that the assessee had any reasonable cause for not filing the return by July 4, 1961, and accordingly, he levied a penalty of Rs. 12,336 under section 271(1)(a)(i) of the Act of 1961, by his order dated April 8, 1964. The assessee appealed to the AAC, who dismissed the appeal. The assessee then filed an appeal to the Appellate Tribunal which reduced the penalty to Rs. 5,000. Aggrieved by the order of the Appellate Tribunal, the assessee as well as the revenue got a reference made to this court on certain questions of law. This court by its order dated February 9, 1972, in I.T. Reference No. 7 of 1969, held that the Income-tax Appellate Tribunal could not have reduced the penalty below the minimum prescribed by Section 271(1)(a)(i) of the Act. In this view of the matter the order of the Income-tax Appellate Tribunal was quashed.

(3.) EVEN Sub-section (4A) was omitted by the Taxation Laws (Amendment) Act, 1975, with effect from October 1, 1975, and a new Section 273A was inserted by the Finance Act of 1978, with effect from June 1, 1978. We may also usefully reproduce the relevant portion of Section 273A :