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TMI Blog1976 (2) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... tax under s. 212(3A), he was liable to penal action under s. 273(c) and charge of interest under s. 217(1A). The Addl. CIT noted that a notice under s. 210(1) was issued by the ITO on21st May, 1969, which was served on the assessee on13th June, 1969asking the assessee to pay advance tax amounting to Rs. 5,605. This demand was based on the last completed assessment which was for the asst. yr. 1967-68. The demand was only paid by the assessee. Thereafter the assessee filed a return declaring an income of Rs. 1,73,030. The ITO completed the assessment on a total income of Rs. 1,81,326. The tax due from the assessee on the basis of said assessed income worked out to Rs. 32,162. Since this exceeded the amount of advance tax demanded under s. 210 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be issued by the CIT under s. 263 to the ITO to levy penalty. Besides the decision in the case of J.J. D Costa relied on for the assessee before the Addl. CIT a reference was made to other decisions of the Tribunal as well. The Departmental Representative on the other hand, submitted that the Department has not accepted the decisions of the Tribunal and have gone in reference to the High Court against the same. He adopted the arguments urged for the Department in those cases. He also relied on a recent decision of the Kerala High Court in the case of CIT vs. Cochin Malabar Estates Ltd. 97 ITR 456 (Ker) and submitted that the Addl. CIT was in this case justified in setting aside the assessment and directing the ITO to initiate penalty pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings. The proceedings contemplated under s. 263 is a well defined self-contained proceeding and by no stretch of imagination can the levy of penalty under s. 271(1)(a) or under s. 273 be considered to be an integral part of the assessment proceedings. It is true that the term "assessment" has different meanings in different contexts in the IT Act. But in the context in which the term "proceeding" is used in s. 263, this is clear that the term 'proceedings" applied to assessment could not include any proceedings other than the proceedings included in Chapter XIV of the Act and "covering ss. 139 to 158". The penalties were, therefore outside the outer limit of the jurisdiction of the CIT when he derives his authority from the error i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order, the Addl. CIT cannot pass an order relating to penalties. It will amount not only to changing over from one order to another but it will amount to changing over to different proceedings under the Act altogether." 6. In the next paragraph 7 of the said order, the Tribunal dealt with the point of levy of interest, which has been reproduced by the Addl. CIT in his order. We do not think that the Addl. CIT was justified in extending the analogy of the observations of the Tribunal in regard to the interest to penalty, when the same has been dealt with in the preceding paragraph 6 and a different conclusion recorded thereon. 7. The point was later on considered by Delhi Bench 'A' in the case of Sidhu Mal & Sons,New Delhito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise under s. 263(1) only an order in a proceeding the record of which he has summoned and examined. In doing to, CIT cannot, in our opinion, change over from the one proceeding to another. Heaving regard to all these facts and circumstances while examining the record of the assessment proceedings, the CIT could not shift to the penalty proceedings, which were never initiated and direct the ITO to levy a penalty after considering the provisions of s. 273(b) of the Act." 8. It is clear from both the orders of the two different Benches of the Tribunal atDelhithat the CIT could not direct the ITO to initiate penalty proceedings under s. 273. Respectfully following these decisions, we hold likewise in this case. 9. As regards interest both the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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