TMI Blog1980 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... the said notice the assessee filed a return on March 11, 1970. In the aforesaid return under s. 148 of the Act, the assessee included Rs.12,500 as hundi loan but failed to prove its genuineness. The ITO, therefore, added Rs. 12,500 as the income of the assessee from undisclosed sources. This order was passed on 12th March, 1970. In the course of reassessment proceedings the ITO was also satisfied that the assessee had concealed the particulars of its income and, therefore, on March 12, 1970, he initiated penalty proceedings under s. 274 read with s. 271(1)(c) of the Act and referred the penalty proceedings on the same day to the IAC under s. 274(2) of the Act as the minimum penalty imposable was more than Rs. 1,000. Before the IAC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 274(2) of the Act. " The Tribunal, at the instance of the revenue, has sent the following question to this court under s. 256(1) of the Act: " Whether, having regard to the Taxation Laws (Amendment) Act, 1970, the Tribunal was right in law in cancelling the levy, of penalty imposed under section 271(1)(c) read with section 274(2) and section 275 of the Income-tax Act, 1961 ?" In our opinion the Tribunal has not properly appreciated the relevant provisions of the Act. The ITO initiated proceedings for penalty on March 12, 1970, and referred the same to the IAC on the same day under s. 274(2) as it then stood. Under that section the IAC was competent to deal with the penalty proceeding inasmuch as the minimum penalty imposable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be read together, because, as already stated, s. 274 governs the procedure whereas s. 275 prescribes the period of limitation for the imposition of a penalty. The ITO passed the reassessment order one 12th March, 1970. In the course of reassessment proceedings he was satisfied that the assessee had concealed the particulars of its income. He, accordingly, initiated the penalty proceeding on 12th March, 1970, and referred the same to the IAC on the same day. The penalty was levied on 17th March, 1972. The levy of penalty was, therefore, not time-barred under s. 275(b) of the Act, for, it provides that no order imposing a penalty shall be passed after the expiration of 2 years from the end of the financial year in which the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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