TMI Blog1978 (3) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the Commissioner of Income-tax was in error in holding that the Income-tax Officer should not have deducted annuity deposit in arriving at the tax on the basis of which penalty was computed under section 271(1)(a) ? " The facts of the case are, briefly, thus : The assessee is a registered firm ; for the year 1964-65, the return of income was filed by the assessee on September 18, 1965, beyond the prescribed date. The Income-tax Officer, therefore, levied penalty under section 271(1)(a) of the Act and while doing so, he deducted annuity deposit which the assessee would have been liable to make as an unregistered firm in arriving at the tax on the basis of which penalty was leviable. The Commissioner of Income-tax in exercise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r clause(b) of section 183, then, notwithstanding anything contained in the other provisions of the Act, the penalty imposable under sub-section (1) shall be the same amount as would be imposable on that firm if that firm were an unregistered firm. The last part of sub-section (2) of section 271 requires the authorities concerned to treat a registered firm as an unregistered firm for the purpose of levying of penalty. It follows that for all intents and purposes to which the fiction incorporated in sub-section (2) of section 271 is applicable, the assessee should be treated as an unregistered firm. The penalty imposable on the assessee would, therefore, be the penalty imposable on it if it were an unregistered firm. In order to determine it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-O. The penalty payable under section 271 (1) read with sub-section (2) thereof has, therefore, to be determined after allowing the benefit under section 280-O to the assessee in the computation of the tax payable. Sri S. R. Rajasekhara Murthy, learned counsel for the revenue, however, argued that as the assessee was a registered firm and, as a registered firm, it was not liable to make annuity deposit under Chapter 22A of the Act, it would be inappropriate to extend the benefit of section 280-O to it. We cannot agree with this submission. When once the law requires a certain set of circumstances to be assumed for a given purpose, we should give full effect to that deeming provision and we should not take into consideration any other fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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