Law:

Section:

Section 271(1)(a), read with section 297 of the Income-tax Act, 1961 and section 22 of the Indian Income-tax Act, 1922 - Penalty - For late filing of return - Assessment year 1958-59 - Whether where return for assessment year in question was filed on 21-12-1962 and assessment was completed thereafter, section 297(2)(g) of 1961 Act was attracted and penalty imposed under section 271(1)(a) of 1961 Act for late filling of return was justified - Held, yes - Whether ITO or Tribunal had no jurisdiction to reduce quantum of penalty below minimum prescribed under section 271(1)(a) of 1961 Act , in cases to which provisions of 1961 Act were attracted on account of provisions of section 297(2)(g) 1961 Act - Held, yes FACTS The assessee failed to file the return within the time allowed by the notice under section 22(2) of the 1922 Act and he also failed to apply for the extension of time for the submission of the return. Subsequently, it filed the return for the relevant assessment year on 21-12-1962. While passing the assessment order the ITO also initiated penalty proceedings under section 271(1)(a) of the 1961 Act for late filing of return. After issuing show-cause notice penalty was imposed by the ITO, being 50 per cent of the amount of tax payable on assessed income. This penalty was confirmed by the AAC. The Tribunal held that although the default was committed under the 1922 Act yet as the assessment was finalised after the coming into force of the 1961 Act, the penalty was rightly imposed upon the assessee under the 1961 Act. However, the Tribunal held that as the default was committed by the assessee when the 1922 Act was in force, the penalty that might be imposed upon the assessee should be commensurate with the penalty imposable under the 1922 Act and the rigid rule prescribed in section 271(1)(a) of the 1961 Act for the imposition of penalty might be relaxed, and, therefore, it reduced the amount of penalty. On reference: HELD Section 297(2)(g) of the 1961 Act provides that any proceedings for the imposition of penalty in respect of any assessment for the year ending on the 31-3-1962, or any earlier, which is completed on or after 1-4-1962, may be initiated…

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