TMI Blog1979 (11) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 1961-62 on March 8, 1963. The assessments having been completed after April 1, 1962, the ITO took proceedings under s. 271(1)(a) for the delay in the filing of the returns. After considering the assessee's explanation, he imposed on the assessee penalties of Rs. 3,276 and Rs. 2,328, respectively, for the two years. This was levied by him at 2% of the tax payable for every month of default as provided in s. 271(1)(a). These penalties were confirmed by the AAC. The assessee preferred further appeals to the Appellate Tribunal. The Tribunal held that the assessee had committed default and that the levy of penalty was called for. It also rejected the contention urged for the assessee that the provisions of s. 275(1) had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty in similar circumstances by reference to the provisions of the new Act. The High Court has held that while the ITO has a discretion to decide to levy or not to levy a penalty under s. 271(1)(a) once he decides to do so, he has to levy a penalty at 2% and he has no discretion to levy the penalty at a lower or higher rate. The action of the Tribunal in reducing the penalty for the same reasons as in the present case to a figure less than a sum of 2% was disapproved by this court. Having regard to the decision of this court we have to hold that the Tribunal was not justified in reducing the amount of penalty imposed by the ITO and confirmed by the AAC. The question is answered in the negative and in favour of the revenue. So far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note directing the issue of the notice under s. 274 before the assessment is completed and that it is not necessary that the notice under s. 274 should itself be issued by then. But, in the present case, even this controversy does not arise. The Tribunal has found that the notices under s. 274 had been issued on November 20, 1963, itself, that is, on the same date as the assessment. The assessee had not challenged the validity of the issue of the notices as subsequent to the assessment before the AAC nor were any facts brought to the notice of the Tribunal to show that the notices had not been factually issued before the completion of the assessment. In these circumstances, the Tribunal's finding that the provisions of s. 275(1) had been c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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