Suhas Chandra Sen, J. - (1.) Two questions of law have been referred by the Tribunal Under Section 256(1) of the I.T. Act, 1961, to this court for an answer: "1. Whether, on the facts and in the circumstances of the case, the Tribunal misdirected itself in law in holding that the proceedings under Section 155 of the Income-tax Act, 1961, for the amendment of the assessment order passed in the case of the assessee was not a proceeding in connection with the regular assessment within the meaning of Section 273 of the Income-tax Act, 1961, and in that view holding that the proceedings tinder Section 273 of the said Act had not been validly initiated ? 2. If the answer to question No. 1 is in the affirmative, whether, on the facts and in the circumstances of the case, the penalty under Section 273(b) of the Income-tax Act, 1961, could be imposed on the assessee ?"
(2.) The respondent (hereinafter referred to as "the assessee") is an individual. The assessment year is 1958-59 and the relevant accounting year is the financial year ended on 31st March, 1958. In the accounting year relevant to the assessment year under reference the assessee was a partner of M/s. G. S. Atwal & Co. (Asansol), Contractors. Apart from share of income from the said firm, the assessee had income from his independent contract business.
(3.) The original assessment for the year under reference was completed on September 29, 1962, on a loss of Rs. 13,485, comprising of income from contract business at Rs. 9,000 and share of loss from the said firm as per allocation at Rs. 22,485. Subsequently, the assessment of the said firm was revised as the original assessment was set aside in appeal by the AAC. On the fresh assessment realised on the said firm, the assessee's share of income from it amounted to Rs. 3,83,598. This led the ITO to revise the assessee's assessment for the year under reference in accordance with the provisions of Section 155 read with Section 154 of the 1961 Act. This order was passed on August 12, 1968.;