Judgment

GROVER, J.:- This is an appeal by certificate from a judgment of the Delhi High Court dismissing a petition under Article 226 and 227 of the Constitution.

2. Appellant No. 1 which carries on business in Delhi was registered as a firm under Section 26A of the Indian Income-tax Act, 1922. Appellants 2 to 5 are its partners. On May 26, 1960, a notice under Section 22 (2) of that Act was served on the firm calling upon it to submit a return of its income for the assessment year 1960-61 (accounting year ending October 31, 1959). The return had to be filed within 35 days of the service of the notice. It was not filed. Further notices were served on two occasions. It filed a return on November 18, 1961, showing income of Rs. 3,55,566. The Income-tax Officer completed the assessment on November 23, 1964, computing the total income of the firm at Rs. 4,75,368. In view of the amendment made by the Finance Act of 1956 in Section 23 (5) of the Act of 1922 the tax payable by the firm as also the amount to be included in the income of each partner was determined. On the same date i.e., November 23, 1964, the Income-tax Officer issued a notice under Section 271 read with Section 274 of the Income-tax Act 1961 calling upon the firm to show cause why an order imposing a penalty should not be passed on account of its failure to furnish the return within time. After considering the explanation submitted by the assessee the Income-tax Officer made an order on November 19, 1966 under Cl. (a) of Section 271 (1) of the Act of 1961 imposing a penalty of Rs. 1,03,434 for non-compliance with the notice under Section 22 (2) of the 1922 Act. The appellants took the matter in appeal before the Appellate Assistant Commissioner challenging the imposition of penalty. Although those proceedings were still pending a writ petition was filed on August 26, 1966 in the High Court challenging, inter alia, the validity and the constitutionality of Section 23 (5) of the Act of 1922 and Section 297 (2) (g) and Section 271 (2) of the Act of 1961 respectively. The High Court did not accede to any of the contentions of the present appellants and the petition was dismissed.

3. We may first deal with the attack against Section 23 (5) of the 1922 Act. It is based on the general principle that you cannot tax the subject twice over to the same tax. The validity of this provision arises only in this way that it is the assessment made under it which can form the basis for imposing the penalty. The High Court declined to examine the matter on the ground that the assessment order dated November 23, 1964 could not be assailed in the writ petition and that the appellants had debarred themselves from getting any relief on account of laches and delay. In our opinion the point sought to be raised is directly connected with the imposition of penalty. If the question of penalty was at large and open to examination the validity of Section 23 (5) of the 1922 Act, the assessment under which would form the basis for determining the amount of penalty, could certainly be canvassed.

4. Section 23 (5) stood as follows after the amendment made by Section 14 of the Finance Act 1956:

"Notwithstanding anything contained in the foregoing sub-sections, when the assessee is a firm and the total income of the firm has been assessed under sub-section (1), sub-section (3) or sub-section (4) as the case may be,-

(a) in the case of the registered firm,

(i) the income-tax payable by the firm itself shall be determined; and

(ii) the total income of each partner of the firm, including therein his share of its income, profits and gains of the previous year shall be assessed and the sum payable by him on the basis of such assessment shall be determined:"

In clause (a), clauses (i) and (ii) were substituted for the following words:

"the sum payable by the firm itself shall not be determined but the total income of each partner of the firm, including therein his share of its income, profits and gains of the previo