Penalties cannot be levied on an assessee under both clauses (a) and (b) of section 28(1) of the Income-tax Act when the assessee has committed defaults by not filing a return at all though required to do so under section 22(2) of the Act and by further not complying with the notice under section 22(4) of the Act.

( 1 ) THIS is a reference under the provisions of section 66 (1) of the Income-tax Act made by the income-tax Appellate Tribunal, Hyderabad Bench, on an application made by an assessment years.

( 2 ) IN respect of income of the assessee during the four assessment years to which this reference relates, viz. , 1951-52, 1952-53, 1953-54, and 1954-55, the assessee committed default in furnishing its return, although called upon to do so by a notice issued to it under the provisions of section 22 (4) of the Act. After the Income-tax Officer completed his assessment under section 23 (4) of the Act, he issued a notice to the assessee why penalties should not be imposed on it under the provisions of sections 28 (1) (a) and 28 (1) (b) of the Act for failure to furnish the return under section 22 (2) and for failure to produce the accounts as required by the notice issued under section 22 (4) of the Act. After hearing the assessee, the Income-tax Officer imposed penalties under both those clauses of sub-section (1) of section 28 of the Act, amounting in the aggregate to a sum of Rs. 15,278. The Income-tax Officer did not however quantify the penalties imposed under those two clauses separately. In respect of the default relating to the year 1951-52, as against the maximum penalty of Rs. 4,315 which according to the Income-tax Officer could have been imposed on the assessee, a penalty of Rs. 1,438 was imposed. Similarly for the assessment years 1952-53, 1953-54 and 1954-55, as against the maximum penalties of Rs. 11,171, Rs. 13,813 and Rs. 33,080 which according to the Income-tax officer could have been respectively imposed upon the assessee, he imposed penalties of Rs. 3,723, Rs. 4,604, and Rs. 5,513. From those orders the assessee appealed to the Appellate assistant Commissioner and to the Income-tax Appellate Tribunal. Both those sets of appeals were dismissed. The assessee applied for a reference to be made to this court of two questions are of law which were formulated by the assessee and those who questions are the questions before us now. They read :

" (1) When the defaults to comply with the notices under section 22 (2) and under section 22 (4)of the Income-tax Act are committed by an assessee, whether the Income-tax Officer has got right to levy penalties under both sub-sections (1) (a) and (1) (b) of section 28 of the Income-tax act ?

(2) Whether an order passed by the Income-tax Officer under section 28 (1) (a) and under section 28 (1) (b) is opposed to law if the quantum of penalty for each default under section 28 (1) (a)and under section 28 (1) (b) is not specified in the order ?"

( 3 ) IT will be pointed out by me - and it had also to be admitted by Mr. Srinivasan appearing for the assessee - that the two questions which the assessee wanted to be referred to this court did not bring out the real issue between the parties. Now, before proceeding to consider the contentions which were urged on half of the assessee before the various Income-tax authorities, it would be necessary to set out the relevant provisions of section 28 of the Income-tax Act.

"28. (1) If the Income-tax Officer, the Appellate Assistant Commissioner or the Appellate tribunal, in the course of any proceedings under this Act, is satisfied that any person - (a) has without reasonable cause failed to furnish the return of his total income which he was required to furnish by notice given under sub-section (1) or sub-section (2) of section 22 or section 34 or has without reasonable cause failed to furnish it within the time allowed and in the manner required by such notice, or (b) has without reasonable cause failed to comply with a notice under sub-section (4) of section 22 or sub-section (2) of section 23, or (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income. he or it may direct that such person shall pay by way of penalty, in the case referred to in clause (a), in addition to th