TMI Blog1983 (8) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... For the assessment year 1960-61: The assessee for this assessment year was a new assessee who was not earlier assessed to any regular assessment. The assessee voluntarily filed an estimate of income of Rs. 35,000 and paid Rs. 15,750 as tax thereof. At the time of filing regular return, the assessee showed a total income of Rs. 64,534. This return by the assessee was filed on May 5,1961. The regular assessment, however, was computed on a total income of Rs. 86,655. The assessee went in appeal and the AAC reduced this assessed income by Rs. 9,322, so that the resultant income came down to Rs. 77,333 on which the tax demand came to be Rs. 34,600. Eighty per cent. of this tax demand of Rs. 34,800 was Rs. 31, 186 less paid by the assessee in advance of Rs. 15,750 and the balance non-paid amount came to Rs. 15,446. The ITO, however, imposed a penalty of Rs. 3,477. Notice under s. 274, read with s. 273(b) of the Act, was issued and the assessee was called upon to show cause as to why penalty should not be imposed. It is desirable to state here that the notice stated that the assessee was an old taxpayer who might have been regularly assessed to income-tax in the past and, hence, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that there was no failure on his part to furnish the estimate. After hearing the parties, the AAC held that notice under s. 274 read with s. 273(b) should have charged the assessee under s. 18A(9) of the old Act, or under s. 212(3) of the new Act which had not been done. All the same, the AAC held that there was a partial default on the part of the assessee and penalty had to be levied. The AAC took the view that the assessee was a new assessee for this assessment year and, under the old Act, there was no minimum limit for levying penalty under s. 18A(9) and also in view of the fact that the assessee had paid the advance tax as estimated by him, the AAC imposed a token penalty of Rs. 500 for the assessment year in question. So far as the assessment year 1961-62 is concerned, as already stated above, notice served upon the assessee was absolutely in the same terms as for the assessment year 1960-61, i.e., for failure to file estimate of income voluntarily. The AAC dropped the penalty proceeding for this assessment year on the ground that the assessee was an old assessee for this assessment year because the assessment for the assessment year . 1959-60 was already compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese circumstances, the Appellate Assistant Commissioner was justified in cancelling the order of imposition of penalty. We, therefore, dismiss the Departmental appeals." Thereafter, at the instance of the Commissioner, Bihar, Patna, the present references have been made under s. 256(1) of the Act. With regard to both the assessment years in question, the learned senior standing counsel for the Department has contended that, even if the notice under s. 274 read with s. 273(b) of the Act was a bad one, wrong labelling of the section by some mistake in the charge framed in the notice did not prejudice the assessee, as the assessee was given an opportunity of being heard. The assessee, in fact, gave a written reply, after having understood correctly the charges that he was to meet. The learned senior standing counsel for the Department contended that the assessee did give the reply to his satisfaction understanding the charges that he was to meet. The contention of the learned senior standing counsel for the Department seems to me to be right as, in the instant case, the ITO had not only given the assessee an opportunity of being heard but the assessee did, in fact, give a writt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned senior standing counsel for the Department has contended that, as the order was passed when the Act of 1961 was in force and the proceedings had commenced, the order had to be passed under the provisions of the 1961 Act and not under the provisions of the 1922 Act. That Act prescribes a minimum penalty under s. 271(1)(a) and, hence, the proceedings being governed by the 1961 Act, the token penalty of Rs. 500 imposed by the AAC and confirmed by the Tribunal was wholly illegal. It is well-settled that the procedural aspect for the levy of penalty is governed by the 1961 Act even though the assessments for the years in question were completed under the provisions of the 1922 Act. The language of s. 297(2)(g) is very clear and definitely says that any proceeding for imposition of penalty in respect of the assessment years for which the assessment was completed under the old Act of 1922 may be initiated and penalty imposed under the 1961 Act. The principle is so well established that no authority need be referred to. For the foregoing reasons, the question referred for our opinion, so far as the assessment year 1960-61 is concerned, must be answered in the negative and I hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .... Two courses are now open to us: to call for a supplementary statement of the case from the Tribunal; or to decline to answer the question raised by the Tribunal and to leave it to the Tribunal to take appropriate steps to adjust its decision under section 66(5) in the light of the answer of this court. If we direct the Tribunal to submit a supplementary statement of the case, the Tribunal will, according to the decisions of this court in New Jehangir Vakil Mills Ltd. v. CIT [1959] 37 ITR 11 (SC), Petlad Turkey Red Dye Works Co. Ltd. v. CIT [1963] 48 ITR 92 (SC) and Keshav Mills Co. Ltd. v. CIT [1965] 56 ITR 365 (SC), be restricted to the evidence on the record and may not be entitled to take additional evidence. That may result in injustice. In the circumstances, we think it appropriate to decline to answer the question on the ground that the Tribunal has failed to consider and decide the question whether the expenditure was laid out or expended wholly and exclusively for the purpose of the business of the company and has not considered all appropriate Provisions of the statute applicable thereto. I, therefore, think that grave injustice would be caused if this aspect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
