Law: Income Tax Act, 1961

Section: 139,142,271(1)(a)

Law: Income Tax Act, 1922

Section: 28,22(2),22(4)

Section 271(1)(a) , read with sections 139 and 142, of the Income-tax Act, 1961 [Corresponding to section 28 read with sections 22(2) and 22(4) of the Indian Income-tax Act, 1922] - Penalty - For late filing of return - Assessment year 1959-60 - Whether it cannot be laid down as a matter of law that proceedings for two or more defaults must invariably be taken separately and can never be disposed of by one penalty order - Held, yes FACTS For the default under sections 22(2) and 22(4), the assessee became liable for penalty under section 28(1)(a). The assessee also rendered himself liable for penalty under section 18A(9) for having filed an incorrect estimate of income for purposes of advance tax. The ITO, thereafter, levied composite penalty under section 18A(9) and 28(1)(a) on the assessee. On appeal, the AAC reduced the penalty to some extent. On second appeal to the Tribunal, for the first time, inter alia, the objection to the levy of a composite penalty was taken. The Tribunal rejected the contention of the assessee on ground that no authority had been cited for the proposition that the levy of a composite penalty for two offences is not permissible under the law. HELD Penalty proceedings cannot possibly be equated to formal charges under the Penal or the Criminal Procedure Code. The tax file of the assessee is one continuing from year to year and at the time when the ITO comes to levy a penalty, it would be asking the impossible of him to treat the two defaults in separate water-tight compartments and to forget what was contained in the file regarding the default under section 22(2) or the previous history of the assessee when levying penalty under section 18A(9) read with section 28 and vice-versa. In some cases it may be advisable to take separate proceedings but it cannot be laid down as a matter of law that proceedings for two or more defaults must invariably be taken separately and can never be disposed of by one penalty order. That apart, in the present case, as pointed out by the Tribunal, there had been no prejudice whatsoever to the assessee. The maximum penalty leviable for the two defaults was well over Rs. 20,000 and the penalty that was…

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