TMI Blog2014 (11) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment' has been defined - once proceedings of penalty us 273(2)(a) or sec.273(2)(aa) have not been initiated in the regular assessment by AO, then penalty proceedings cannot be initiated in the reassessment proceedings and penalties are liable to be deleted - thus, this was reassessment and therefore the provisions of Section 273(2)(aa) will not be applicable in the reassessment proceedings – the order of the Tribunal us upheld – Decided against revenue. - INCOME TAX REFERENCE NO. 2 of 2004 - - - Dated:- 7-11-2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MR SUDHIR M MEHTA, ADVOCATE FOR THE RESPONDENT : MR BS SOPARKAR WITH MRS SWATI SOPARKAR, ADVOCATE JUDGEMENT Per: K S Jhaveri: 1. The brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment.' 3. On the above facts, the following question is referred: Whether on the facts and circumstances of the case, the Tribunal was right in law in holding that penalty u/s 273(a) (aa) cannot be levied as it has been initiated in the reassessment proceedings? 4. Learned advocate Mr.Mehta for the applicant submitted that the penalty proceedings under Section 273 of the I.T.Act was initiated in the original assessment order passed under Section 143(3) on 18.6.1987. However, because of the pendency of appeal before the Tribunal against original assessment order, penalty was not finalized. Finally, the order of Tribunal dated 17.5.1991 was received in C.I.T.'s office on 17.6.1991 which provided full six months time f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities to impose penalty, even in reassessment proceedings, it could have provided for the same. The Allahabad High Court in CIT v. Smt. Jagjit Kaur [1980] 126 ITR 540, held that the assessments made under section 147(a) read with section 143(3) were not regular assessments within the meaning of section 273(b) read with section 212(3) and, therefore, the levy of penalty was not valid. We are in agreement with the aforesaid view and hold that we cannot read the words regular assessment as occurring in section 273 as justifying the levy of penalty in the proceedings under section 147(b). The same view was taken by the Punjab and Haryana High Court in Smt. Kamla Vati v. CIT [1978] 111 ITR 248 and by the Patna High Court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in sec.273 is also in the same context as was before the apex court and the same reasoning is to be made applicable. Once proceedings of penalty under section 273(2)(a) or sec.273(2)(aa) have not been initiated in the regular assessment by A.O. which is undisputed fact in all those three appeals, then penalty proceedings cannot be initiated in the reassessment proceedings and penalties are liable to be deleted. As we are allowing the appeals of assessee on legal point, there is no need of going on merit and no party's learned representative has also not addressed us on the same. 9. On hearing the learned counsel for the parties and perusing the papers, we are of the opinion that this was reassessment and therefore the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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