J.S. Verma, J.
1. This is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the assessee to answer the following questions of law, namely :
' (i) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the persons which constituted the association of persons and the firm were the same and there was no difference in the identity of persons sought to be assessed ?
(ii) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the Income-tax Officer had jurisdiction to impose penalties as the quantum thereof exceeded Rs. 1,000?'
2. For the assessment years 1968-69 and 1969-70, the assessee filed returns in the status of a firm but the Income-tax Officer refused registration to the assessee as a firm and the assessments were made in the status of ' association of persons '. The assessee appealed to the Appellate Assistant Commissioner against the refusal of registration. During the pendency of that appeal, on February 11, 1972, the assessee disclosed additional income earned in the business in the name of Rajkumar, a member of the family, describing the same as a revised return. The Income-tax Officer reopened the assessments for both the years under Section 147 of the Act and the income from business carried on in the name of Rajkumar, a member of the family, was estimated and added to the income of the assessee. In the quantum appeals, some relief was given by the Appellate Assistant Commissioner, In the meantime, the Income-tax Officer initiated penalty proceedings under Section 271(1)(c) of the Act and issued show-cause notices to the association of persons. The Income-tax Officer rejected the explanation given in reply by the association of persons and levied penalties of Rs. 3,000 and Rs. 5,000, respectively, for the two assessment years. The assessee's appeals to the Appellate Assistant Commissioner were allowed and the penalties were cancelled. On further appeal by the Revenue to the Tribunal, imposition of penalties by the Income-tax Officer was restored but the amount of penalties was reduced to Rs. 2,500 and 4,000, respectively, for the two assessment years.
3. Aggrieved by the decision of the Tribunal, the assessee applied for reference under Section 256(1) of the Act to this court which has been granted and the Tribunal has referred the aforesaid two questions for decision by this court.
4. The aforesaid second question may be disposed of at the outset since the point involved therein is covered by the earlier decisions of this court in which the Income-tax Officer's jurisdiction to impose penalty exceeding Rs. 1,000 up to the amount of Rs. 25,000 after April 1, 1971, has been upheld. In the present case, the relevant date for determining the Income-tax Officer's jurisdiction in March 29, 1976, the date of reassessment and, therefore, it must be held following the earlier decisions in Addl. CIT v. Nand Kishore : 143ITR182(MP) CIT v. Fakirchand Dayaram : 143ITR184(MP) and CIT v. A. N. Tiwari : 124ITR680(MP) that the Income-tax Officer had jurisdiction in the present case to impose penalties in excess of Rs. 1,000. Accordingly, the above-quoted second question is answered in favour of the Revenue and against the assessee.
5. We now take up the aforesaid first question. There is no dispute that the identity of the natural persons constituting the association of persons and the firm which was subsequently granted registration on appeal by the Appellate Assistant Commissioner is the same. The contention of the assessee has been that fresh notices should have been issued to the firm which was subsequently granted registration and not to the association of persons only, since the association of persons and the firm are different assessees according to the definition of ' person ' given in Section 2(31) of the Income-tax Act, 1961. On this basis, the assessee contended that imposition of penalty without issuing fresh notice to the firm after it had been granted registration is illegal. This contention has been rejected by the Tribunal and the same is reiterated on behalf of the assessee before us.
6. In our opinion, this contention advanced in respect of the first question of law referred has no merit and has to be rejected. There being no dispute that the identity of persons constituting the association of persons and the subsequently registered firm was the same, issuance of fresh notice to the firm after it was granted registration in appeal by the Appellate Assistant Commissioner was, at best, a mere technicality. It is not disputed that the: assessee did not suffer any prejudice of any kind for want of this fresh notice inasmuch as there was no additional defence available to the assessee after it had been granted registration and the quantum of penalty, including the rate at which it was levied, was also not in any manner affected thereby. Sub-section (2) of Section 271 of the Act equates a registered firm with an unregistered firm for the purpose of imposition of penalty under Sub-section (1) of Section 271. This is a further reason in support of this view in a case, like the present, where there was complete identity between the persons constituting the association of persons and the firm, which was granted registration subsequently.
7. We find that the above view taken by us is in accord with the view taken by the Orissa High Court in Capital Talkies v. CIT : 108ITR489(Orissa) . R. N. Misra J., as he then was, speaking for the Division Bench, in that case also placed reliance on the provisions contained in Section 271(2) of the Act for reaching the same conclusion in a similar situation where identity of persons to be penalised was the same. With respect, we are in agreement with that view. Another case cited at the bar was a decision of the Supreme Court in CIT v. Raweshwar Lal Sanwarmal : 82ITR628(SC) touching this point in different circumstances. That decision was based on the difference in the two capacities of the assessee as individual and the karta of the Hindu undivided family, since the individual and the Hindu undivided family are totally different units of taxation. In the case of a registered firm and an unregistered firm, by virtue of Section 271(2) of the Act, there is no difference for the purpose of, imposition of penalty white that distinction exists in the two different capacities which were being considered by the Supreme Court in the case before it. The ratio of the Supreme Court decision is, therefore, not applicable to the present case, to which Section 271(2) of the Act applies on account of which that decision is distinguishable.
8. Consequently, this reference is answered against the assessee and in favour of the Revenue as under :
(i) The Tribunal was justified in holding that the persons that constituted the association of persons and the firm were the same and there was no difference in the identity of the persons sought to be assessed.
(ii) The Tribunal was justified in holding that the Income-tax Officer had jurisdiction to impose the penalties.
9. The reference is answered accordingly. There shall be no order as to costs.