JUDGMENT

This is a case stated under section 6(1) of the Indian Incometax Act, 1922 (hereinafter referred to as the Act). The question referred is:

"Whether it is legal to levy a composite penalty for more than one offence under section 28 of the Act?"

The material facts are these: the assessee is a Hindu undivided family. The relevant assessment year is 195960. The assessee did not comply with the notices under sections 22(2) and 22(4) of the Act and the assessment was completed under section 23(4) of the Act on an income of rs. 45,560 resulting in an assessment and demand of Rs. 13,778. For the default under sections 22(2) and 22(4) of the Ac t, the assessee became liable for penalty under section 28(1)(a) up to the maximum limit of Rs. 20,667, being one and a half times of the amount of tax assessed (i.e., one and a half times of Rs. 13,778).

Apart from the above defaults, the assessee was required by a notice under section 18A(1) of the Act, dated 30th May, 1958, to deposit advance tax in the sum of Rs. 6,907 on the basis of the last completed assessment when the notice was issued. The assessee, however, did not comply with the demand and instead exercised his option by filing his own estimate on the 17th of December, 1958, showing his income at Rs. 15,000 with a tax liability of Rs. 1,042 only. As already noticed, the tax finally determined in the regular assessment was Rs. 13,778. The assessee, therefore, rendered himself liable for penalty under section 18A(9) of the Act for having filed an incorrect estimate of income for purposes of advance tax. The maximum penalty leviable was Rs. 4,576, being one and a half times of the difference between 80% of the tax actually levied and the tax already paid by the assessee.

The Incometax Officer initiated proceedings under section 28(1)(a) and 18A(9) of the Act for failure to comply with the notice under section 22(2) of the act and also for filing an incorrect estimate of its income under section 18A(2) of the Act, respectively. For this purpose a notice under section 28(3) read with section 18A(9) of the Act was served upon the assessee to show cause why penalties be not levied for defaults under sections 22(2) and 18A(9) of the act read with section 28 of the Act. No explanation was submitted by the assessee. He merely brought to the notice of the Incometax Officer the fact that he had filed an appeal against the assessment order and, therefore, required the penalty proceedings to be stayed. The Incometax Officer rejected the prayer for stay and agianst the maximum penalties leviable of Rs. 20,668 under section 28(1)(a) and of Rs. 910 under section 18A(9) of the act imposed a composite penalty of Rs. 6,889 under these two sections. On appeal to the Appellate Assistant Commissioner, no objection seems to have been taken as to the levy of a composite penalty but only on the merits. The Appellate assistant Commissioner, in the circumstances of the case, reduced the penalty by Rs. 1,000. Therefore, the finally determined penalty stood at rs. 5,889 for both the defaults under sections 22(2) and 18A(9) of the Act. The matter was carried in second appeal to the Tribunal and there, for the first time, inter alia, the objection to the levy of a composite penalty was taken. The Tribunal pointed out: "No authority had been cited for th proposition that the levy of a composite penalty for two offences is not permissible under the law. In fact a composite penalty has in this case worked out to the benefit and advantage of the assessee. If separate penalties were imposed upon the assessee for different offences, the quantum of penalties would have been much more and would have been prejudicial to the assessee. We, therefore, find no force in this contention and reject it." Hence, this reference at the instance of the assessee.

Even before us, it is conceded that there is no decision of any court bearing upon the question which has been referred. Therefore,t he matter being res integra it will hav