Penalty order not void for delay alone where the statute prescribes no express limitation period.

A penalty order under section 28(1)(c) of the Indian Income-tax Act, 1922, was not invalid merely because it was passed after considerable delay, since the statute prescribed no express limitation period. The Court held that delay alone does not imply a time bar, and the Tribunal had erred in treating lateness itself as sufficient to void the order. The earlier decision relied on by the assessee was distinguished because it did not lay down that delay by itself makes a penalty order void. The legal question was answered against the assessee and in favour of the Revenue.

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Issues: Whether a penalty order under section 28(1)(c) of the Indian Income-tax Act, 1922, was bad in law merely because it was passed after considerable delay, in the absence of any express period of limitation.

Analysis: The reference arose from a penalty order made after a long interval from the completion of assessment. The Tribunal had treated the delay itself as sufficient to invalidate the order. The Court held that a period of limitation cannot be implied merely from delay where the statute contains no express time limit for making a penalty order. The reliance placed on the earlier decision was found to be misplaced, because that decision did not lay down that delay alone renders the penalty void. The Court further observed that while the Tribunal could, on the facts, have interfered with the penalty as a matter of propriety, the reference before it concerned only the legal validity of the order on the ground of delay.

Conclusion: The penalty order was not bad in law merely because of delay, and the question was answered in the negative, against the assessee and in favour of the Revenue.

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