1979 (3) TMI 54

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....rise to this reference may now be stated. For the assessment year 1959-60, the assessee was issued a notice under s. 22(2) of the Indian I.T. Act, 1922 calling for the return of income which was served upon the assessee on May 28, 1959. The return was due to be filed on or before July 2, 1959. However, the same was filed by the assessee on February 16, 1963, and thus a delay of 44 complete months was committed. The ITO completed the assessment on February 12, 1964, and while making the order wrote the following language: "Assessed. Issue requisite demand along with penalty notice in respect of the belated return." Thereafter the demand notice and the show cause notice for penalty were issued and the same were dated February 14, 1964. ....

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....sessment proceedings were completed and only thereafter the requisite penalty notice was issued. Section 274 provided that no order imposing penalty can be made unless the assessee was heard and reasonable opportunity was afforded to him. From the cumulative reading of ss. 271 and 274, it was argued that the order issuing the penalty notice followed after the assessment proceedings were completed. It was further pointed out that the actual notice regarding the penalty was issued two days after this order was made by the ITO. Bare reading of the order made by the ITO would rather indicate that it was a composite order regarding assessment as well as issuance of the penalty notice. It could not, therefore, be stated that the assessment pro....