TMI Blog1983 (7) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income, according to the letter dt. 27th January, 1981 extracted by the ITO in the impugned penalty order dt. 16th March, 1981, was filed on 19th August, 1977. The ITO, however, records that the original assessment in this case was framed u/s 144 vide order dt. 19th August, 1977 at the net loss of Rs. 41,867. Thereafter assessee made an application u/s 146 of the Act and the assessment was cancelled. After the regular assessment was made, the assessee went up in appeal. That assessment was set aside and as a consequence of the directions issued by the AAC, assessment order dt. 21st March, 1979 was made by the ITO. In this assessment order the total income of the assessee was determined at total income of Rs. 3,714. However, there was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravely erred in relying upon the ratio decidendi of Madras High Court judgment because that judgement is based upon old law before insertion of Explanation 4 to s. 271 (1) (c) w.e.f. 1statement April,1975. According to the revenue it is no longer necessary that there should be positive total income for purpose of imposition of penalty for concealment because the penalty is to be based on "the amount of tax sought to be evaded" The order of the ITO be restored because the penalty has been cancelled by the ld. Commissioner by merely following the judgement of Madras High Court. 6. On the other hand, the ld. counsel for the assessee submitted that the provision of Explanation 4(a) to s. 271(1) have a to be read with cl.(iii) of s. 271 (1)(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total income assessed" will become redundant and redundancy cannot be attributed to the legislature. Relying upon the rule of harmonious construction he summed up that the penalty was rightly cancelled by the CIT(A) and his order can further be supported with the judgement of Madhya Pradesh High Court in the case of CIT vs. Jaora Oil Mill (1981) 129 ITR 423 (MP). The judgement of Madras High Court along with this judgement laid down the law applicable to the facts of the case of the assessee. The revenue has not done any thing, it was contended, to the deserve an interference in the order of the Commissioner. 7. In the rejoinder, however, the ld. departmental representative submitted that income assessed can be a negative figure and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctly points out the difference between the tax payable and the tax assessed. This judgement was delivered on 28th January, 1973. Thereafter cl.(iii) referred to supra, came as a substitute for the original clause by the Taxation Laws (Amendment) Act, 1975 w.e.f. 1statement April, 1976. The Hon'ble Court has pointed out that the tax payable is an amount which a demand notice is issued u/s 156 of the IT Act, 1961. When we see the case of the assessee in this context, we find that total income assessed was a loss of Rs. 2,08,193 to be carried forward. Even it is considered that total income can be a negative figure, we can't concede to the proposition that income assessed can't be a negative figure. The question of assessment will arise only w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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