Penalty for delayed tax return filing cannot replace section 20 proceedings where tax remained unpaid on return dates.

Penalty for delayed filing and non-payment of agricultural income-tax could not be imposed under section 17A(3) where the default at the return due dates consisted of unpaid tax accompanying the returns; that default was to be addressed under section 20. However, once the returns were eventually filed and tax still remained outstanding for the later period, penalty liability could continue for that subsequent non-payment. The penalty orders under section 17A(3) were therefore unsustainable and were set aside, with the matter remitted for consideration of penalty only in relation to the later period of default.

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Issues: Whether penalty for delayed filing of returns and non-payment of tax due on the return dates could be imposed under section 17A(3) of the Agricultural Income-tax Act, 1950, and whether the matter required action under section 20 for the period after the returns were eventually filed.

Analysis: The returns for the relevant assessment years were filed long after the due dates, but part of the tax remained unpaid even on the dates of filing, and the balance was paid only later. The Court held that default consisting of non-payment of tax along with the returns on the due dates was not properly dealt with under section 17A(3); the proper remedy for that default was proceedings under section 20. At the same time, the assessee remained liable to penalty for the period of non-payment after the dates on which the returns were actually filed, in respect of the amounts then still outstanding.

Conclusion: The penalty orders under section 17A(3) were unsustainable and were set aside, but the matter was remitted for consideration of penalty for the later period of default. The decision is in favour of the assessee only to that extent.

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