ADDITIONAL COMMISSIONER OF INCOME TAX Vs. RAICHAND AMICHAND

JUDGEMENT

(1.) AS directed by this court, the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion ;

(2.) THE material facts giving rise to this reference briefly are as follows : THE assessee is a registered firm deriving income from business in grains, cotton seeds, etc. For the assessment year 1968-69, the ITO assessed the total income of the assessee at Rs. 83,930 as against the returned income of Rs. 57,753, THE ITO also initiated penalty proceedings under Section 271(1)(c) of the Act and referred the case to the IAC under Section 274(2) of the Act. THE IAC, by his order dated 22nd January, 1972, imposed a penalty of Rs. 25,000 on the assessee under Section 271(1)(c) of the Act. Aggrieved by the order passed by the IAC, the assessee preferred an appeal before the Tribunal. It was contended before the Tribunal that the assessment proceedings for the years 1968-69 were completed on 9th December, 1969, and, in view of the provisions of Section 275 of the Act prescribing the period of limitation, the order passed by the IAC on 22nd January, 1972, was barred by time and hence illegal. THE Tribunal upheld this preliminary objection and cancelled the penalty imposed by the IAC. Aggrieved by this order, the Department submitted an application for making a reference, but that application was rejected. THE Department, therefore, submitted an application before this court and, as directed by this court, the aforesaid question of law has been referred by the Tribunal to this court for its opinion.