Penalty delay in return-filing defaults is not fatal, but unexplained delay must be weighed before upholding the order.

Where no limitation period is prescribed for completing penalty proceedings, mere lapse of time does not by itself invalidate a penalty for default in filing a return. Inordinate and unexplained delay, however, is a material factor that the final fact-finding authority must consider when deciding whether the penalty order should be sustained. The circumstances causing the delay, and whether the assessee was responsible for it, are relevant to that assessment. As a matter of strict law, the penalty could be imposed even years after the assessment proceedings ended, but the delay remained relevant to the propriety of upholding the order.

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Issues: Whether a penalty for default in filing a return could validly be imposed long after the assessment proceedings had ended, and whether inordinate delay in completing penalty proceedings affected the propriety of the penalty order.

Analysis: Where no period of limitation is prescribed for completing penalty proceedings, the mere lapse of time does not by itself render the penalty order invalid. However, inordinate and unexplained delay is a material factor bearing on the propriety of the order and must be considered by the final fact-finding authority before sustaining the penalty. The circumstances responsible for the delay and the question whether the assessee was at fault for it are relevant to that determination.

Conclusion: The penalty could, as a matter of strict law, be imposed even though it was levied years after the assessment, but the delay had to be taken into account in judging whether the order should be upheld.

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