TMI Blog1989 (3) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... e to this reference, briefly, are as follows The assessee derives income from forest contracts. For the assessment year 1964-65, the assessee filed his return of income showing total income of Rs. 4,085. The Income-tax Officer, however, determined the total income of the assessee at Rs. 19,000. The Income-tax Officer also initiated penalty proceedings under section 271(1)(c) of the Act and as the minimum penalty imposable exceeded Rs. 1,000, the Income-tax Officer referred the case to the Inspecting Assistant Commissioner under section 274(2) of the Act. On March 2, 1971, the Inspecting Assistant Commissioner passed an order imposing penalty of Rs. 15,000 on the assessee under section 271(1)(c) of the Act. Aggrieved by that order, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded by the Tribunal, was undoubtedly passed after the expiry of the period of limitation prescribed by section 275. The short question for consideration, therefore, is whether the period of limitation prescribed by section 275 of the Act applies not only to the initial penalty order, but also to the penalty order passed after the case is remanded by the appellate authority. Before we proceed to appreciate the contentions advanced on behalf of the parties, it would be useful to refer to the provisions of section 275 of the Act which are as under : "275. No order imposing a penalty under this Chapter shall be passed- (a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the Inspecting Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of a penalty, is the subject-matter of an appeal. In the instant case, it is not disputed that no appeal had been preferred by the assessee from the order of assessment passed by the Income-tax Officer. Therefore, as held by this court in CIT v. Dr. Manoranjan Mohanty [1988] 171 ITR 95, clause (b) of section 275 would be applicable in such a case. The initial order levying penalty was passed by the Inspecting Assistant Commissioner within the time prescribed therefor by clause (b) of section 275. It is, however, contended on behalf of the assessee that clause (b) of section 275 is attracted when an order imposing penalty, subsequent to remand, is passed. The clause "No order imposing a penalty under this Chapter shall be passed" came up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that sub-section (2)(b) of section 33B of the Act would not have the effect of curtailing the appellate powers of the Tribunal under sub-section (4) and hence it could not be held that a direction to dispose of the case afresh could not be given to the Commissioner by the Appellate Tribunal when the period of limitation prescribed under sub-section (2)(b) of section 33B had expired. This decision of the Bombay High Court was affirmed by the Supreme Court in CIT v. National Taj Traders [1980] 121 ITR 535. In view of this decision of the Supreme Court, the decisions of some High Courts relied upon by learned counsel for the assessee holding that the bar of limitation provided in section 275 applies not only to the initial penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
