KAMLA VATI Vs. COMMISSIONER OF INCOME-TAX CENTRAL

JUDGEMENT

(1.) ON March 17, 1970, the assessee made a voluntary disclosure of income of Rs. 1,30,000 which was allowed to be spread over equally over the four assessment years 1961-62, 1962-63, 1963-64 and 1964-65. For the assessment year 1961-62, the assessee had not filed a return of income on the ground that she had no taxable income. She had not filed any estimate of advance tax to be paid by her under Section 18a (3 ). After the settlement pursuant to the voluntary disclosure, she filed a return on March 25, 1970, for the assessment year 1961-62, showing an income of Rs. 450 from house property and an income of Rs. 32,500 disclosed by her under the settlement. The Income-tax Officer levied a penalty of Rs. 3,608 under Section 271 (1) (a ). For the assessment year 1964-65, the assessee had filed an estimate of advance tax showing an income of Rs. 36,800 and the tax payable by her as Rs. 10,700. Thereafter, she filed a return showing her income as Rs. 35,615. After the settlement, pursuant to the voluntary disclosure, the Income-tax Officer completed the assessment for the assessment year 1964-65 on a total income of Rs. 1,70,298. Penalty of Rs. 7,660 was levied on her under Section 273 (a) for the assessment year 1964-65. The Income-tax Appellate Tribunal has referred for our decision the following questions : "1. Whether, on the facts and in the circumstances of the case, penalty of Rs. 3,608 has been validly levied on the assessee under Section 271 (1) (a) of the Income-tax Act, 1961, for the assessment year 1961-62 ?

(2.) WHETHER , on the facts and in the circumstances on the case, penalty of Rs. 7,660 has been validly levied for the assessment year 1964-65?"

(3.) SECTION 273 (a) enables an Income-tax Officer if, in the course of any proceedings in connection with the regular assessment for the assessment year commencing on April 1, 1970, or any subsequent assessment year, he is satisfied that any assessee has furnished under Section 212 an estimate of advance tax payable by him which he knew or had reason to believe to be untrue, to direct such person to pay by way of penalty a sum prescribed by that provision. Regular assessment is defined in Section 2 (40) to mean the assessment made under Section 143 or Section 144. Sections 143 and 144 deal with assessment made in the ordinary course either on the filing of return by the assessee under Section 139 or on the failure of the assessee to file a return after the issuance of notice under Section 139 (2 ). Prima facie, an assessment or reassessment made under Section 147 of income which has escaped assessment cannot be considered to be an assessment under Section 143 or Section 144. Prima facie, therefore, an assessment or reassessment made under Section 147 cannot be considered to be regular assessment within the meaning of Section 2 (40 ). If so, Section 273 (a) is not attracted. Shri D. N. Awasthy, learned counsel for the revenue, however, urged that under Section 148, before making the assessment or reassessment under Section 147, the Income-tax Officer was bound to serve on the assessee a notice containing all or any of the requirements which may be included in a notice under Section 139 (2) and thereafter the provisions of the Act were to apply as if the notice were a notice issued under that sub-section and, therefore, an assessment or reassessment made under Section 147 had to be considered to be an assessment under Sections 143 and 144. He invited our attention to the fact that the expression "regular assessment", though not defined in the 1922 Act, occurred in some of the provisions of that Act, viz. , Sections 18a (4), 18a (6), 18a (9)and the heading of Section 23 (b ). He argued that under the 1922 Act, the expression "regular assessment" was construed to include assessments both under Sections 23 and 34 of that Act as distinguished from provisional assessment under Section 23b, self-assessment, etc. , and that the definition of "regular assessment" under Section 2 (40) of the 1961 Act was not meant to depart from the meaning which the expression had already been given by judicial interpretations.