Law: Income Tax Act, 1922

Section: 28

Income tax Act (XI of 1922)---S.28 C.B.R. Circular No. 10 of 1977 Penalty proceedings to be finalised within a reasonable time Where the assessment was completed in 1974, there was, held, no justification to keep penalty proceedings pending till 1984. (1977) 35 Tax 26 ref. ORDER These are two departmental appeals against a registered firm dealing in Cigarettes and relate to the assessment years 1974 75 and 1975 76. The department is aggrieved against the deletion of penalty under section 28(2 A) for the assessment year 1974 75 at Rs.1,000 for default of payment of admitted tax alongwith return under section 22 A. For the assessment year 1975 76, the penalty has been imposed under section 28 (1 B)(b) for default of payment of advance tax and the penalty imposed is Rs.4,446. The learned A.A.C. deleted both these penalties on the ground of laches. Brief facts of the case under which these appeals have arisen are that default of non payment of admitted tax alongwith return in the assessment years 1974 75 and default in making payment of advance tax in the assessment year 1975 76 are not denied. The assessment orders for both these assessment year were framed on 30 12 1974 and 27 11 1975 respectively. The first notice for the assessment year 1974 75 was issued under section 28(3) on 30 12 1974 which was served on 6 1 1975. For the assessment year 1975 76, similar notice was issued on 27 11 1975 for 15 12 1975 but the assessee did not reply. However, it appears, the relevant assessing authority slept over the matter and finally passed the penalty order on 30 4 1984 for both the assessment years. Before the learned A.A.C. it was pleaded that although no time limit has been prescribed under the relevant section under which the penalty has been imposed, but at the same time the penalty could be imposed within a…

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