Law:

Section:

Section 28(1)(a) of the indian Income-tax Act, 1922 [Corresponding to section 271(1)(a) of the Income-tax Act, 1961]-Penalty-For late filing of return-Assessee failed without reasonable cause to file his return of income for assessment year 1960-61 within time allowed to him by notice issued under section 22(2) of the 1922 act-However, assessee filed return before completion of assessment-ITO imposed penalty rejecting assessee's contention that no penaly for late filing of return could be levied on assessee inasmuch as he had filed return within the time specified in section 22(3) of the 1922 act, that is to say, before completion of assessment-Whether ITO justified in imposing-Held, on facts, yes Facts For the assessment year 1960-61, the assessee failed without reasonable cause to file his return of income within the time allowed to him by notice issued under section 22(2) of the 1922 Act [corresponding to section 139(2) of the 1961 Act]. The ITO, after overruling the assessee's objection that penalty proceedings under the 1961 Act could not be taken against him, and after rejecting his explanation for the delay in filing the return, levied a penalty on the assessee under section 271(1)(a). On appeal, the AAC confirmed the penalty order. On second appeal, the Tribunal took the view (i) that section 22(3) contemplated that if any assessee did not furnish the return within the time allowed by section 22(1) or 22(2), he could validly file a return or revised return at any time before the assessment was completed; (ii) that since the original return as well as the revised returns were filed before the assessment was made, the returns must be considered as having been filed within the time prescribed by law; (iii) that since section 22(3) had been complied with, it logically followed that section 22(2) must be held to have been complied with and if such compliance had been made, the provisions of section 271(1)(a) were not attracted. Consequently, the Tribunal set aside the penalty order. On reference: Held 1. A bare reading of section 28(1)(a) will show that insofar as the present case is concerned, the omission to furnish a return of total income by the person…

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