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R.C. No.8 of 1970, decided on 5th November, 1971.
---S.28--Penalty--Levy of penalty after inordinate delay is not proper--Penalty has to be levied within a reasonable time--Period of nine years, held , was not reasonable period.
S. Dasaratharama Reddy for the Assessee.
P.Rama Rao for the Commissioner.
Date of hearing: 5th November, 1989
The question referred to us by the Appellate Tribunal is as follows:
"Whether, on the facts and in the circumstances of the case, any penalty was eligible in the assessee"s case for the assessment year 1946-47
For the assessment year 1946-47 the assessee was assessed to a certain sum of tax and the assessment became final on July 24, 1954. But there was no order levying penalty in his case till July 1, 1963. Though no period for levying the penalty has been fixed in the Indian Income-tax Act, 1922, it has been held by this Court that there should not be any inordinate delay and it should be levied within a reasonable time. Even under the new Act the period prescribed for levy of penalty is two years after the completion of the assessment. In the present case even after the order of the Tribunal on the assessment a period of nine years had elapsed. The department has not chosen to furnish any explanation for the inordinate delay. Here reduction in the quantum of penalty is not a ground to say that no interference is justified. As there is inordinate delay we consider that the levy of penalty has not been made within a reasonable time. We therefore, answer the reference m the negative. There will be no order as to costs. Advocate"s fee.Rs.100.
M.B.A./695/T. Question answered in the negative.
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