GWALIOR PALACE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a reference at the instance of the assessee under section 256(1) of the Income-tax Act, 1961 (the "Act" for short). The Income-tax Appellate Tribunal referred the following question for consideration of this court in connection with the income-tax assessment year 1976-77 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the penalty imposed under section 273(b) of the Income-tax Act, 1961, of Rs.1,520 for the assessment year 1976-77 ?"

(2.) It is not in dispute that for the assessment year 1976-77, the assessee did not file an estimate of advance tax payable. Consequently, the assessee was called upon to show cause why penalty should not be levied. No reply to the show-cause notice was furnished to the Income-tax Officer. Consequently, penalty of Rs.1,520 was levied under section 273(b) of the Act. The assessee appealed against the levy of penalty to the Commissioner of Income-tax (Appeals) unsuccessfully. A second appeal to the Tribunal met the same fate. The assessee then sought the present reference under section 256(1) of the Act.

(3.) The short contention urged before us by learned counsel for the assessee is that at the relevant time when the penalty was levied on 20/03/1979, there was no provision like section 273(b) of the Act. It is pointed out that there were certain amendments which became effective from 1/06/1978. Pursuant to those amendments, section 212(3) of the Act which was in existence till 1/06/1978, had been renumbered as section 209A(1). Similarly, section 273(b) of the Act which was in force prior to 1/06/1978, was numbered as section 273(1)(b) of the Act. Having looked into the provisions, prior to the amendment and after the amendment, we find that they are practically the same except that there was a re-grouping of the sections which took effect from 1/06/1978. Basically, there is no difference in the obligation of the assessee to furnish an estimate of advance tax payable and the ingredients necessary for the levy of penalty for failure to furnish an estimate of advance tax. The contention that at the time when the order under section 273(b) was passed, the section was numbered as section 273(1)(b) and that section 212(3) was renumbered as section 209A(1) does not, in our opinion, affect the power of the Income_tax Officer to levy penalty. That apart, we find that the assessment year involved is 1976-77. The law that is applicable for the assessment year 1976-77 is the one that was in force at the beginning of the assessment year, viz., on 1/04/1976. In such circumstances, the Income-tax Officer was justified in applying the provisions of law as were in force for the assessment year 1976-77 without taking note of the amendments which came into effect from 1/06/1978. Even though the order of penalty was passed on 20/03/1979, the Income-tax Officer had to apply the provision of law as was in force on the first day of the assessment year 1976-77 or alternatively the provision of law in force when the default was committed. In that view also, the order of the Income-tax Officer levying penalty is not liable to be questioned.