COMMISSIONER OF INCOME TAX Vs. BIHAR COTTON MILLS LIMITED

JUDGEMENT

(1.) A statement of the case has been submitted by the Income-tax Appellate Tribunal, "B" Bench, Patna (hereinafter referred to as the Tribunal), under Section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as the Act), referring the following question as directed by this court :

(2.) THE relevant facts of the case may be culled from the statement of the case as well as from the orders of the Income-tax Officer, the Inspecting Assistant Commissioner of Income-tax and the Tribunal. THE assessment year involved is 1958-59. For the assessment year 1958-59 the Income-tax Officer originally completed the assessment under Section 23(3) of the Indian Income-tax Act, 1922 (hereinafter referred to as the old Act). THE assessee returned a loss of Rs. 30,519. THE Income-tax Officer calculated the loss at Rs. 33,608, which was unabsorbed depreciation which was to be carried forward. This assessment was made on February 19, 1959. THE .assessment order has been annexed and has been marked as annexure A forming part of the statement of the case.

(3.) BEING aggrieved by the order of the Inspecting Assistant Commissioner, the assessee filed an appeal before the Tribunal. The Tribunal after hearing the arguments of the parties held that the purpose of the proceedings under Section 147 is to tax the income which should have been assessed during the original assessment proceedings and so the return under Section 148 of the Act is like a revised return pertaining to the same assessment year and the same income which the assessee was required to return originally and, therefore, the offence committed by the assessee for which he was liable to penalty commenced in the original assessment proceeding (itself). The Tribunal also held that even if the assessee is guilty of no default in proceedings under Section 147 of the Act, a penalty may still be imposed in such proceedings in respect of the original default committed by the assessee while filing the original return. The Tribunal took the view that the provisions for imposition of penalty ia this case will be applicable as it was on the date of the filing of the original return and so the case was covered by the Supreme Court decision in CIT v. Anwar Ali [1970] 76 ITR 696.