COMMISSIONER OF INCOME TAX Vs. SAVITA M THAKAR

JUDGEMENT

(1.) A statement of the case under S. 256(1) of the IT Act, 1961 (hereinafter referred to as "the Act"), has been submitted by the Tribunal, "B" Bench, Patna, referring the following question of law for the opinion of this Court :

(2.) THE assessee as per the provision of S. 212(3) of the Act was required to file an estimate of the total income and to pay advance tax accordingly. But the assessee failed to do so. The assessee was given an opportunity of being heard in this respect, vide notice under S. 274 read with S. 273 of the Act. But the assessee did not give any explanation. The ITO, therefore, imposed penalties under S. 273(b) for the asst. yrs. 1966 -67, 1967 -68, 1968 -69, 1969 -70 and 1970 -71. The penalty orders of the ITO relating to these penalties have been annexed and marked as annexures A, A -2, A -4, A -6 and A -8, respectively.

(3.) THE assessee appealed before the AAC who disposed of all the appeals relating to penalties under S. 271(1)(a) of the Act by his consolidated order dated January 11, 1974. Sri D. Sengupta, on behalf of the assessee, raised the point of limitation with regard to the date of imposition of penalty. The AAC has pointed out that the penalties in these cases were imposed on March 23, 1973, and the relevant assessments were completed on July 13, 1970. He held that in terms of s. 275. of the Act, the penalty proceedings should have been completed within two years from July 13, 1970, i.e., by July 12, 1972. He, therefore, took the view that penalties were imposed after about eight months from the expiry of the date of limitation. He has also pointed out that the appellant, Smt. Savita M. Thakar, is legal representative of Shri Late Manikant Thakkar. He has also pointed out that amendment regarding the limitation period by Act No. 42 of 1970 was effective from April 1, 1971, and according to the amendment, the limitation period should count from the end of the financial year in which the assessment was made. The AAC took the view that as the amendment was effective from April 1, 1971, the penalty orders were liable to be cancelled as penalty orders were barred by limitation. He accordingly cancelled the penalty orders. The order of the AAC relating to penalty under S. 271(1)(a) of the Act has been annexed and marked as annexure "B" forming part of the statement of the case. It appears that although the AAC passed a consolidated order and he also passed separate orders relating to the asst. yrs. 1967 -68, 1968 -69 and 1969 -70, allowing the appeals for the reasons discussed in the consolidated order.