TMI Blog1992 (4) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... see had not complied with the provisions requiring the payment of advance tax at the time when the assessment orders were passed. The Income-tax Officer while passing the assessment orders did not charge any interest under section 217 of the Act. There was also no mention made in the assessment orders or in any separate order passed regarding initiation of penalty proceedings under section 273 of the Act. As the said assessment orders appeared to be prejudicial to the interests of the Revenue, the Commissioner of Income-tax issued notices on August 19, 1972, asking the respondent to show cause why action under section 263 of the Income-tax Act should not be taken. After taking the assessee's reply into consideration, a consolidated order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order and, as such, it could not be covered by recourse to section 263 of the I.T. Act, inasmuch as it was neither prejudicial to the interests of the Revenue nor was it erroneous ? From the narration of facts, it is clear that there is an obvious error in the order of the Income-tax Tribunal. The Tribunal had upheld the action of the Commissioner of Income-tax in so far as it concerns section 217. Therefore, the reference to this provision in the question is not correct. We, accordingly, reframe the question as follows " Whether, on the facts and circumstances of the case, the Tribunal was correct in holding that the question of levying penalty under section 273(b) was totally extraneous to the scope of the assessment order, and, as s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether under section 271(1)(a) or section 273(b) are proceedings independent of, and separate from, the assessment proceedings. It then came to the conclusion that failure to initiate penalty proceedings would not give jurisdiction to the Commissioner of Income-tax to pass an order under section 263 and direct initiation of penalty proceedings. After this point was decided in favour of the assessee, the Commissioner of Income-tax filed a special leave petition being SLP (Civil) Nos. 11391-11392 of 1981 (see [1984] 147 ITR (St) 1) and the same was dismissed by the Supreme Court on March 2, 1984. It is clear, therefore, that the Division Bench decision of this court in J. K. D'Costa's case [1982] 133 ITR 7 has been confirmed by the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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