COMMISSIONER OF INCOME TAX Vs. PADAM KUMARI SURANA

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred under Section 256(1) of the Income-tax Act, 1961 (for short "the Act"), the following question :

(2.) THE original assessment was made on December 5, 1974, on a total income of Rs. 10,471. THEreafter, proceedings under Section 147 of the Income-tax Act, 1961, were initiated in which the assessment was made on a total income of Rs. 60,437. Simultaneously, proceedings under Section 273(b) of the Act were started during the reassessment proceedings for the assessee's failure to file proper advance tax estimates to be made in view of Section 212(3) and pay tax accordingly. THE assessee contended before the Income-tax Officer that the penal proceedings could not be initiated in reassessment proceedings. He did not accept the arguments of the assessee and imposed penalty of Rs. 3,000. On appeal, the Appellate Assistant Commissioner quashed the penalty on the ground that penalty proceedings under Section 273(b) could not be legally initiated in the course of reassessment proceedings. Feeling aggrieved, the Revenue went up in appeal to the Income-tax Appellate Tribunal which upheld the order of the Appellate Assistant Commissioner by finding that penalty could be imposed in regular assessment proceedings.

(3.) WE find substance in the submission of the assessee's counsel and are unable to widen the meaning of the aforesaid expression by importing into it something not provided for. Under this definition, only a proceeding which is taken under sections 143 and 144 is covered. The Legislature, if it had desired to empower the income-tax authorities to impose penalty, even in reassessment proceedings, it could have provided for the same. The Allahabad High Court in CIT v. Smt. Jagjit Kaur [1980] 126 ITR 540, held that the assessments made under Section 147(a) read with Section 143(3) were not "regular assessments" within the meaning of Section 273(b) read with Section 212(3) and, therefore, the levy of penalty was not valid. WE are in agreement with the aforesaid view and hold that we cannot read the words "regular assessment" as occurring in Section 273 as justifying the levy of penalty in the proceedings under Section 147(b). The same view was taken by the Punjab and Haryana High Court in Smt Kamla Vati v. CIT [1978] 111 ITR 248 and by the Patna High Court in the case of CIT v. Ram Chandra Singh [1976] 104 ITR 77.