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K.P. Narayanappa Setty and Co. Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberR.C. No. 8 of 1970
Judge
Reported in[1975]100ITR17(AP)
ActsIncome Tax Act, 1922
AppellantK.P. Narayanappa Setty and Co.
RespondentCommissioner of Income-tax
Appellant AdvocateS. Dasaratharama Reddy, Adv.
Respondent AdvocateP. Rama Rao, Adv.
Excerpt:
direct taxation - levy of penalty - income tax act, 1922 - inordinate delay in levy of penalty - nine years elapsed after order on assessment by tribunal - inordinate delay in levy of penalty not allowed - new act prescribes levy within two years after completion of assessment - held, levy not made within reasonable time as there is substantial delay in levy of penalty. - .....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. mere reduction in the quantum of penalty is not a ground to say that no interference is justified. as there is inordinate.....
Judgment:

A.D.V. Reddy, J.

1. 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 exigible in the assessee's case for the assessment year 1946-47?'

2. 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. Mere 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 in the negative. There will be no order as to costs. Advocate's fee, Rs. 100.


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