COMMISSIONER OF INCOME TAX Vs. MITHILA MOTORS PRIVATE LIMITED

JUDGEMENT

(1.) AT the instance of the Commissioner, Bihar, Patna, these two references under 8. 256(1) of the I.T. Act, 1961 (hereinafter to be referred to as " the Act"), have been made by the Income-tax Appellate Tribunal, "B" Bench, Patna. The assessment years in question are 1960-61 and 1961-62. The questions referred for the opinion of this court are are follows :

(2.) THE assessee for this assessment year was a new assessee who was not earlier assessed to any regular assessment. THE assessee voluntarily filed an estimate of income of Rs. 35,000 and paid Rs. 15,750 as tax thereof. At the time of filing regular return, the assessee showed a total income of Rs. 64,534. This return by the assessee was filed on May 5, 1961. THE regular assessment, however, was computed on a total income of Rs. 86,655. THE assesses went in appeal and the AAC reduced this assessed income by Rs. 9,322, so that the resultant income came down to Rs. 77,333 on which the tax demand came to be Rs. 34,600. Eighty per cent. of this tax demand of Rs. 34,800 was Rs. 31,186 less paid by the assessee in advance of Rs. 15,750 and the balance non-paid amount came to Rs. 15,446. THE 1TO, however, imposed a penalty of Rs. 3,477.

(3.) SO far as the assessment year 1961-62 is concerned, as already stated above, notice served upon the assessee was absolutely in the same terms as for the assessment year 1960-61, i.e., for failure to file estimate of income voluntarily. The AAC dropped the penalty proceeding for this assessment year on the ground that the assessee was an old assessee for this assessment year because the assessment for the assessment year 1959-60 was already completed on August 31, I960 and, hence, the relevant advance income-tax year for the assessment year 1961-62 would begin on the April 1, 1960, and end on March 31, 1961, and during this period, i.e., April 1, 1960, to March 31, 1961, the assessment for the year 1959-60 was already completed. In that view of the matter, the AAC held that it was incumbent upon the Department to have issued advance tax notice and demanded payment from the assessee which was clearly not done and, hence, the assessee could not be charged for any negligence or default. The AAC also held that the charge framed in the notice under Section 274, read with Section 273(b) of the Act, was irrelevant and incorrect and in this view of the matter he held that no penalty under Section 273(b) could be levied for this assessment year.