Penalty proceedings and delay under income-tax law: long delay alone did not justify quashing the penalty orders.

Penalty proceedings under income-tax law were not invalid merely because they were completed after a long delay, since no statutory limitation period governed initiation or completion. Delay remained a relevant factor in assessing whether the penalty power had been properly exercised, but the issues of inordinate delay and whether it was satisfactorily explained were factual matters for the Tribunal or authority concerned. On the facts, the Tribunal considered the pendency of the assessee's appeals, the size of the additions, and the absence of a satisfactory explanation for part of the delay, yet declined to cancel the penalties because the delay was not so extreme as to justify interference.

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Issues: Whether penalty orders imposed under the income-tax law were liable to be quashed solely because of the long delay in completing the penalty proceedings.

Analysis: There was no statutory period of limitation for initiating or completing penalty proceedings. The absence of limitation did not make every delayed penalty proceeding invalid, but delay remained a relevant circumstance in judging whether the power to levy penalty had been properly exercised. The Court approved the view that the questions whether the delay was inordinate and whether it was satisfactorily explained were matters of fact for the Tribunal or authority concerned. On the facts, the Tribunal had considered the pendency of the assessee's appeals and the size of the additions, and had also noticed the absence of a satisfactory explanation for part of the delay, but nevertheless declined to cancel the penalties on the ground that the delay was not of such magnitude as to justify interference.

Conclusion: The penalty orders were not liable to be quashed merely on the ground of delay, and the question was answered against the assessee.

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