Judgement

PANIGRAHI, C. J :- This is a reference under S. 66(2), Income-tax Act, made by the Income-tax Appellate Tribunal, Madras Bench B, on a question of law formulated as follows :

"Whether on the facts and in the circumstances of the case the notice issued to the assesses under S. 28(3) was valid, and if not, whether the order levying penalty on the basis of that notice is valid."

2. The assessee is a Hindu undivided family carrying on business in grains, grocery and twists at Sambalpur. A notice under S. 22(2), Income-tax Act was served on the assessee on 31-5-43, but he failed to make a return of his total income, and the assessment was subsequently made under S. 23(4) on 11-1-44. The Income-tax Officer thereupon issued a notice under S. 28(3) on 10-1-44 calling upon the assessee to show cause why a penalty should not be imposed.

The assessee submitted his explanation for his default, by a petition dated 22-1-44, but did not appear before the Income-tax Officer. Thereafter a penalty of Rs. 450/- was imposed by that Officer on the assessee by his order dated 25-4-45, with the previous approval of the Inspecting Assistant Commissioner. Against this order, the assessee appealed to