RAMANAND SINGH AND COMPANY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A statement of the case has been submitted by the Income-tax Appellate Tribunal, Patna Bench, Patna (hereinafter referred to as "the Tribunal"), under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), referring the following questions of law for the opinion of this court:

(2.) THE relevant facts of the case may be briefly stated. THE Income-tax Officer had originally imposed a penalty of Rs. 2,280 under Section 271(1)(a) of the Act. Examination of the records showed that the penalty under Section 271(1)(a) of the Act was wrongly calculated. THE assessee was assessed on a total income of Rs. 72,791 in the status of a registered firm. THE Income-tax Officer took the view that so far as the penalty proceedings are concerned, the quantum of the penalty is calculated on the tax that would be payable treating the firm as unregistered firm. THE Income-tax Officer found that the tax on unregistered firm would amount to Rs. 36,464 and since there was a delay of 50 months, penalty imposable under Section 271(1)(a) would amount to Rs. 36,400. However, since the tax on the unregistered firm itself amounted to Rs. 36,464, the Income-tax Officer took the view that the penalty would be limited to 50% of Rs. 36,464 or Rs. 18,232. THE Income-tax Officer found that by mistake penalty of only Rs. 2,280 was imposed and so it was a mistake apparent from the record. THE Income-tax Officer served a notice on the assessee under Section 154/155 of the Act for compliance on July 30, 1970. THE assessee chose to remain silent and no written reply was filed. THE Income-tax Officer, therefore, rectified the mistake in view of Section 271(2) of the Act, and under Section 154 of the Act, imposed a penalty of Rs. 18,232 in place of the original penalty of Rs. 2,280. THE penalty order of the Income-tax Officer has been annexed and marked as annexure A forming part of the statement of the case.

(3.) WHEN the argument of the case was taken up, Mr. K. N. Jain, for the assessee, did not argue before us that the rectification under Section 154 of the Act could not be made as it was not a mistake apparent from the record and that it required detailed investigations or long-drawn debate and process of reasoning. This argument which, was advanced before the Tribunal has been given up before us and so it cannot be doubted that now it has to be held that it was a case of a mistake apparent from the record which could be rectified under Section 154 of the Act.