ADDITIONAL COMMISSIONER OF INCOME TAX Vs. RAICHAND AMICHAND
LAWS(MPH)-1980-10-22
HIGH COURT OF MADHYA PRADESH
Decided on October 21,1980

ADDL. COMMISSIONER OF INCOME-TAX Appellant
VERSUS
RAICHAND AMICHAND Respondents


Cited Judgements :-

SIEMENS INDIA LTD VS. STATE OF MAHARASHTRA [LAWS(BOM)-1986-3-35] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. SAVITA M THAKAR [LAWS(PAT)-1985-4-38] [REFERRED TO]


JUDGEMENT

Sohani, J. - (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 ;
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the order imposing penalty on the assessee-firm was illegal on the ground that it was barred by limitation, having regard to the provisions of Section 275 of the Income-tax Act, 1961, as amended by Section 50 of the Taxation Laws (Amendment) Act, 1970?"

(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.
Learned counsel for the parties conceded that the answer to the question referred to us is covered by the decision of a Division Bench of this court in CIT v. Fakir Chand Dayaram( MCC No. 256 of 1976, decided on 7th February, 1980--([1983] 143 ITR 184 (MP)). Section 275 of the Act, which provides for the period of limitation for imposing a penalty, was amended with effect from 1st April, 1971. In M.C.C. No. 256 of 1976, it was held that (p. 185): "if in a particular proceeding the period of limitation was still running on 1st April, 1971, the amended provision enlarging the period of limitation would apply". In view of that decision, our answer to the question referred to us is in the negative and against the assessee.

The reference is answered accordingly. In the circumstances of the case, parties shall bear their own costs of this reference.



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