TaxTMI 
TaxTMI 
1985 (8) TMI 34
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.... Assistant Commissioner was right in law in invoking the provisions of the Income-tax Act, 1961, when the assessment was completed under the provisions of the Indian Income-tax Act, 1922, and the appeal was filed under that Act ? (3) Whether, on the facts and in the circumstances of the case, the levy of penalty on a disrupted Hindu undivided family was justified in law ? (4) Whether, on the facts and in the circumstances of the case, the assessee was prevented by reasonable cause from filing the return within the time prescribed by law ? (5) Whether, on the facts and in the circumstances of the case, the Income-tax Officer must be deemed in law to have waived the levy of penalty? " The assessment in question relates to the assessm....
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....mber of contentions were raised by him before the Tribunal, including a challenge to the competence of the Appellate Assistant Commissioner to levy penalty. It was contended that the Income-tax Officer who passed the assessment order had waived the levy of penalty and, therefore, the Appellate Assistant Commissioner had no jurisdiction to levy penalty. The next contention was that the assessee was a Hindu undivided family and the family was partitioned on October 11, 1966, and hence no penalty proceeding could be initiated against or penalty levied on the disrupted family. There was a further controversy, namely, according to the assessee, that the provisions of the Indian Income-tax Act, 1922 (for brevity's sake referred to as " the Act of....
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.... Although the Tribunal has taken a contrary view in this connection, we propose to proceed on the assumption that the provisions of the Act of 1922 are applicable, because, in our view, even on that assumption, Mr. Khatri cannot succeed in the reference. The first submission of Mr. Khatri is that the powers of the Appellate Assistant Commissioner at the hearing of the appeal are set out in section 31 of the Act of 1922. It is pointed out by him that the only material provision in this connection is contained in clause (a) of sub-section (3) of section 31 of the Act of 1922. A perusal of this clause shows that the only power of the Appellate Assistant Commissioner, at the hearing of the appeal, is to confirm, reduce, enhance or annul the ....
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....under the Act of 1922. In the course of that proceeding, the Appellate Assistant Commissioner was satisfied that the assessee had failed to furnish the return of its total income required to be furnished within the prescribed time and without reasonable cause. In view of this, it is clear that the Appellate Assistant Commissioner had jurisdiction under section 28 to make an order for penalty. The reliance placed by Mr. Khatri on section 31, we are afraid, is altogether misplaced, as the relevant section is section 28. The next submission of Mr. Khatri is that the statement of the case shows that on October 11, 1966, the assessee-Hindu undivided family was partitioned and hence no penalty could be levied thereafter on that family as "the ....
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....he said order recognised that the partition had taken place earlier than the date on which the order for penalty was passed. In the present case, although there is a factual recital in the statement of the case that the Hindu undivided family constituting the assessee was partitioned from October 11, 1966, there is nothing to show that there was any order passed under section 25A recording any such partition nor is there anything to show that there was any application made in that behalf. In this regard, we may point out that the provisions of section 25A clearly lay down that a particular procedure has to be followed on an application made under that section claiming that a partition had taken place among the members of a Hindu undivided f....
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....a reasonable cause for the late filing of a return is to a large extent a question of fact and facts have to be proved to establish such a reasonable cause. As far as the question pertaining to the waiver of penalty by the Income-tax Officer is concerned, no submission was made by Mr. Khatri, and rightly so. A contention of waiver, in a case like this, could be raised only where the Income-tax Officer was aware of the fact of the late filing of the return and realised that he could levy a penalty for that reason and in spite of this did not choose to levy a penalty. In the present case, there is nothing to show that the Income-tax Officer had realised that the return was not filed in time or that the question of penalty was at all presen....