TaxTMI 
TaxTMI 
2004 (12) TMI 15
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts and in the circumstances of the case, the Tribunal is justified in ignoring the reasonable cause for inordinate delay in imposing penalty under section 28(1)(c) and in holding that the case of the assessee falls within the purview of the decisions of the hon'ble High Court in the case of Ram Kishan Baldeo Prasad v. CIT [1967] 65 ITR 491 (All) and in the case of Bisheshwar Lal v. ITO [1970] 75 ITR 698 (All)?" Briefly stated the facts giving rise to the present reference are as follows: The reference relates to the assessment year 1947-48. The Income-tax Officer completed the assessment for the aforementioned assessment year under section 23(3)/34 of the Indian Income-tax Act, 1922, hereinafter referred to as "the Act of 1922" on Mar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....led. The Tribunal has passed the order in conformity with the opinion expressed by the Third Member and had upheld the order passed by the Appellate Assistant Commissioner cancelling the penalty. We have heard Sri Shambhoo Chopra, learned standing counsel appearing for the Revenue and Sri V.K. Upadhyay, learned counsel appearing for the respondent. Learned counsel for the Revenue submitted that there was sufficient explanation for the inordinate delay in imposition of penalty and, therefore, it could not have been cancelled only on the ground of the order having been passed after more than 20 years. According to him, this was a case where the total income itself and the tax thereon was the subject-matter of multifarious proceedings by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te Assistant Commissioner cancelling the penalty. He submitted that reliance placed by learned counsel for the Revenue on the various proceedings, which did not relate to the respondent, would not come to his rescue for explaining the delay. He further submitted that the Tribunal had not committed any illegality. Having heard learned counsel for the parties, we find that the facts are not in dispute. The assessment order for the assessment year 1947-48 was admittedly passed on March 31,1956, and the penalty proceeding were also initiated during the course of the assessment proceedings. However, the penalty was imposed vide order dated December 7, 1976, i.e., after more than 20 years. It is not clear from the record as to whether any proc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in respect of the assessment year 1945-46 could have been imposed in August, 1957, propriety required the changed circumstances to be taken into consideration and the responsibility for the inordinate delay should be considered and fastened before levying the penalty or upholding it. This court had also referred to the decision in the case of Mohd. Atiq [1962] 46 ITR 452 (All) and had held that where there is no prescribed period of limitation, the delay can only be a factor, albeit a very relevant factor, to be taken into consideration in determining the propriety of the order and where the assessee is not to blame for the inordinate delay in completing penalty proceedings and the sword of Damocles has been kept hanging over his head for m....