ASSISTANT COMMISSIONER OF INCOME TAX Vs. SATINDER PURI
LAWS(IT)-1989-11-6
INCOME TAX APPELLATE TRIBUNAL
Decided on November 22,1989

Appellant
VERSUS
Respondents

JUDGEMENT

S.Grover, - (1.)IN this Revenue's appeal the order of Deputy Commissioner of INcome-tax (Appeals), Amritsar Range, Amritsar, cancelling penalty of Rs. 4,390 which had been levied by the ITO under Section 27 l(l)(a) of the INcome-tax Act, 1961,hereinafter referred as the Act, in respect of assessment year 1980-81 is contested.
(2.)The assessee's loss return of Rs. 11,038 came to be accepted by order dated 22-11 -1982. The returned loss was as per the assessee's version, on the ground, that his share of loss from the firm M/s Ravi Solvex amounted to Rs. 56,431.
Later the ITO passed an order captioned under Section 154/155 of the Act by which he determined the taxable income at a positive figure of Rs. 40,040 because there was no loss determined in the case of Ravi Solvex and, therefore, the figure of Rs. 56,431 came to be adjusted. In view of the positive assessable income as per order under Section 155 dated 31-7-1985, the ITO initiated penalty proceedings

under Section 271 (1 )(a) & 273( 1 )(b) of the Act and also levied interest under Section 139(8) and 217(1) of the Act because against the due date of 31-7-1980 return had been submitted on 24-5-1982. Rejecting the assessee's plea that since no penalty proceedings had been initiated in the order passed under Section 143(1) of the Act, it could not be done in the order under Section 154 of the Act and also that there was reasonable cause for late filing, levied the penalty of Rs. 4,390.

(3.)IN the first appeal the assessee raised two-fold separate distinct contentions. First; that the provisions of Section 154/155 of the Act could not be invoked to initiate penalty proceedings under Section 27 l(l)(a) of the Act and second that in any case the assessee entertained bona fide belief that there being loss share from M/s Ravi Solvex his income was not taxable and, therefore, obliged to file the return under the statutory period.


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