JUDGMENT D. B. Lal, J.—The Income-Tax Tribunal has referred the following question for the opinion of the High Court:— "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the Appellate Assistant Commissioner was not justified in canceling the order of Income Tax Officer under section 271 (1) (a)". 2. The facts giving rise to this reference may now be stated, For the assessment year 1959-60 the assessee was issued a notice under section 22 (2) of the Indian Income Tax Act, 1922 calling for the return of income which was served upon the assessee on 28-5-1959. The return was due to be filed on or before 2-74959. However, the same was filed by the assessee on 16-2-1963 and thus a delay of 44 complete months was committed. The I come Tax Officer completed the assessment on 12-2-1964 and which making the order wrote the following language:— "Assessed. Issue requisite document along with penalty notice in respect of the belated return". 3. Thereafter the demand notice and the show cause notice for penalty was issued and the same was dated 14-6-1964. The assessee raised the plea that due to illness of his wife he could not file the return in time. He further contended that the penalty could not be levied under section 271 (1) (a) of the Indian Income Tax Act, 1922. His further contention was that the penalty proceedings were not validly initiated inasmuch as the notice under section 274 was not issued before the completion of the assessment proceedings. The Income-tax Officer did not accept these pleas of the assessee and thereafter an appeal was filed before the Appellate Assistant Commissioner who accepted the plea under section 274 and held that the notice regarding penalty was issued two days after the completion of the assessment and as such the said notice was illegal and the penalty could not be imposed. The department filed an appeal before the Tribunal and the Tribunal upheld the decision of the Income Tax Officer and did not agree with the contention made before the Appellate Assistant Commissioner. However, the Tribunal considered that the aforesaid question of law did a rise and the same is referred to this Court for opinion, 4. The department filed an appeal before the Tribunal and the Tribunal upheld the decision of the Income Tax Officer and did not agree with the contention made before the Appellate Assistant Commissioner. However, the Tribunal considered that the aforesaid question of law did a rise and the same is referred to this Court for opinion, 4. A perusal of section 271 (1) (a) does indicate that the Income Tax Officer "in the course of any proceeding under the Act" if satisfied that without reasonable cause the assessee has failed to furnish the return, he can direct that he shall pay a sum by way of penalty. Emphasis is on the words "in the course of any proceeding". Since the language used by the Income Tax Officer indicated that he wrote "assessed" and thereafter mentioned the language that the requisite penalty notice be issued to the assessee, it was argued that the assessment proceedings were completed and only thereafter the requisite penalty notice was issued. Section 274 provided that no order imposing penalty can be made unless the assessee was heard and reasonable opportunity was afforded to him. From the cumulative reading of sections 271 and 274, it was argued that the order issuing the penalty notice followed after the assessment proceedings were completed. It was further pointed out that the actual notice regarding the penalty was issued two days after this order was made by the Income Tax Officer. 5. Bare reading of the order made by the Income Tax Officer would rather indicate that it was a composite order regarding assessment as well as issuance of the penalty notice. It could not, therefore, be stated that the assessment proceedings were complete and only thereafter the order was made for the issuance of the penalty notice. In fact, the Income Tax Officer was in the midst of completing the assessment proceedings and while completing the said proceedings he realised that belated return was filed and, therefore, he directed for the issuance of the penalty notice. In this view of the matter, both the assessment order as well as the order issuing penalty notice were simultaneous and it could not be stated that the assessment proceedings were complete and the order regarding issuance of notice was an after-thought. It was rather part and parcel of the very same order. In this view of the matter, both the assessment order as well as the order issuing penalty notice were simultaneous and it could not be stated that the assessment proceedings were complete and the order regarding issuance of notice was an after-thought. It was rather part and parcel of the very same order. It was also contended on behalf of the revenue that unless the order was made in writing, which necessarily meant that the Income Tax Officer signed that order, the assessment proceedings cannot be stated to be complete. It is abundantly clear that the Income Tax Officer signed that order subsequent to his writing a direction that penalty notice was to be issued for the belated return. Therefore, the order regarding issuance of penalty notice was made before the assessment proceedings were completed. 6. Since the order regarding penalty notice was made in the course of the proceedings completing the assessment, section 274 did not, in any manner, hit that order and it could not be stated that reasonable opportunity was not given to the assessee for the penalty. In that connection some argument was advanced with reference to section 275 which indicated that no order imposing a penalty was to be passed after the expiration of two years from the date of the completion of the proceedings in the course of which the proceedings for the imposition of the penalty have been commenced. It is evident that before the completion of the proceedings regarding, assessment the order was passed for imposing penalty. It is further clear that in the course of this very proceeding the imposition of penalty did commence The mere fact that the notice was actually issued two days after the said order was passed, was immaterial because the order itself contained a direction for imposition of penalty and that is how the proceedings for imposition of penalty commenced within the very same order. Therefore, there is no difficulty with regard to section 275 and the proceedings regarding imposition of penalty did not vitiate because of any such argument based on that section. 7. In this view of the matter, we answer the question referred to us by saying that the Tribunal was right in holding that the Appellate Assistant Commissioner was not justified in canceling the order of the Income Tax Officer under section 271 (1) (a) of the Act. 7. In this view of the matter, we answer the question referred to us by saying that the Tribunal was right in holding that the Appellate Assistant Commissioner was not justified in canceling the order of the Income Tax Officer under section 271 (1) (a) of the Act. The case shall be referred back to the Income Tax Tribunal for further action in the matter. No order is made as to costs.