Annual return penalty confined to the elected filing basis; revised monthly-return levy struck down as invalid.

Where an assessee had validly opted for annual returns under the applicable rule, delay had to be assessed only by reference to the annual return, and not on a monthly-return basis. A revision that proceeded on the incorrect assumption that the assessee was bound to file monthly returns could not support a fresh or enhanced penalty under Section 12(3)(c). The revised penalty was therefore invalid and set aside, while the original penalty already levied for delay in filing the annual return remained undisturbed.

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Issues: Whether penalty under Section 12(3)(c) could be revised on the footing that the assessee was liable to file monthly returns under Rule 18 when the assessee had opted for annual returns under Rule 15, and whether the original penalty already levied for delay in filing the annual return could be disturbed.

Analysis: The assessee had opted for assessment on the basis of annual returns under Rule 15. In that situation, the delay had to be computed with reference to the annual return alone. The original assessment order had already levied penalty for the delay in filing the annual return, and that order had not been challenged. The subsequent revision proceeded on an incorrect premise that the assessee had opted for monthly returns under Rule 18. That premise was contrary to the admitted factual position and could not sustain a fresh or enhanced levy of penalty.

Conclusion: The revised levy of penalty treating the assessee as one filing monthly returns was invalid and was set aside. The original penalty levied for delay in filing the annual return remained undisturbed.

Ratio Decidendi: Where an assessee has opted for annual returns under the applicable rule, penalty for delay must be confined to that return basis, and a revision founded on an incorrect assumption of monthly-return liability is without jurisdiction.

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